Is buying a property in Dubrovnik Old Town a good investment?

Last updated on December 7, 2023

Yes, the analysis of Dubrovnik's property market is included in our pack

If you've wandered through the historic streets of Dubrovnik Old Town and been captivated by its medieval charm, you may have considered investing in a property here to call this UNESCO World Heritage Site your permanent residence on the Adriatic coast.

Is it a good idea though? How is the real estate market there? Are prices going up or going down? Do people make profits on their real estate investments? What about the rental demand?

We'll answer all these questions for you! When building and updating our property pack for Croatia, our team has been researching and surveying this area. Actually, lots of customers are interested in investing there. So we thought it would be a good idea to add some information about it in our pack.

Why do property buyers like investing in Dubrovnik Old Town?

Dubrovnik Old Town, often referred to as the 'Pearl of the Adriatic', stands out as a highly attractive location for property buyers for several reasons.

This historic center of Dubrovnik, a UNESCO World Heritage site, offers a unique blend of medieval charm, stunning architecture, and a picturesque coastal setting.

One of the key factors making Dubrovnik Old Town appealing is its rich cultural heritage. The area is renowned for its well-preserved medieval city walls, historic buildings, and cobbled streets, offering a living experience akin to stepping back in time.

This historic ambiance is something that is hard to find in other real estate markets, especially in modern cities. The Old Town's architecture, marked by Gothic, Renaissance, and Baroque influences, provides a distinct aesthetic that you won't easily find elsewhere in Dubrovnik or in other real estate markets.

Another draw for property buyers is the Old Town's vibrant cultural scene. From the renowned Dubrovnik Summer Festival to various art exhibitions and performances, the area is a hub for cultural enthusiasts.

Additionally, its Mediterranean climate, with mild winters and warm summers, adds to its allure, making it an ideal location for those seeking a sunny coastal lifestyle.

The popularity of Dubrovnik Old Town as a property destination surged notably in the 2000s. This increase in interest was partly fueled by its recognition as a UNESCO World Heritage site and its exposure in popular media, most notably as a filming location for the TV series "Game of Thrones".

This fame has significantly boosted its global profile, attracting a diverse range of buyers, including celebrities, history buffs, and those seeking luxury properties with a touch of history.

However, the hype surrounding Dubrovnik Old Town doesn't just rely on its current fame. The area has a timeless appeal due to its historical significance and natural beauty.

While trends in property markets are subject to change, the unique combination of cultural heritage, stunning architecture, and beautiful natural surroundings gives Dubrovnik Old Town a lasting appeal.

The typical buyers attracted to this area are diverse. They include affluent individuals looking for luxury second homes, history enthusiasts drawn to the area's rich past, and investors seeking properties in a globally recognized location. The mix of cultural heritage, lifestyle, and investment potential appeals to a wide range of people.

Despite these strengths, Dubrovnik Old Town is not without its weaknesses. The area can be quite crowded, especially during the peak tourist season, which might not be appealing for those seeking a quieter living environment.

Additionally, the preservation regulations in place to protect the historical integrity of buildings can limit renovation possibilities, which might be a downside for some buyers.

Furthermore, the property prices in this area tend to be higher than in other parts of Dubrovnik, reflecting its premium status but potentially putting it out of reach for some buyers.

Overall, Dubrovnik Old Town offers a unique blend of historical charm, cultural richness, and stunning natural beauty, making it an attractive location for a diverse range of property buyers. While its popularity is partly influenced by current trends, its enduring appeal lies in its timeless qualities.

However, potential buyers should also consider factors such as the bustling tourist activity and preservation restrictions that come with owning property in this historic area.

Make a profitable investment in Dubrovnik

Better information leads to better decisions. Save time and money. Download our guide.

Why is Dubrovnik Old Town a nice place to live?

Living in Dubrovnik Old Town offers a unique and enriching experience, marked by its blend of history, culture, and stunning Mediterranean ambiance.

The lifestyle here is deeply influenced by the area's rich cultural heritage. The Old Town is characterized by its well-preserved medieval architecture, cobbled streets, and historic landmarks, offering a living experience akin to being part of a living museum. This setting creates a unique daily life, where modern amenities meet historic charm.

Culturally, Dubrovnik Old Town is vibrant. It's not just about the stunning views of the Adriatic Sea or the historic city walls; it's about being part of a community that values art, history, and tradition.

The Dubrovnik Summer Festival and other cultural events bring a lively atmosphere to the streets, showcasing music, theater, and dance. Living here means immersing yourself in a rich cultural tapestry.

The expat community in Dubrovnik Old Town is quite welcoming, consisting of individuals and families drawn by the town's beauty and history. This community is well-integrated with the local population, adding to the multicultural feel of the area.

It's a place where people from diverse backgrounds come together, brought by a shared appreciation for the town's unique lifestyle.

Living in Dubrovnik Old Town, however, can be quite costly. The area is a premium real estate location, reflecting in both property prices and the cost of living. Daily expenses, dining out, and shopping can be higher compared to other parts of Croatia.

However, for many, the cost is justified by the quality of life and the unique environment the Old Town offers.

Safety is a strong point for Dubrovnik Old Town. The area is known for its low crime rates, making it a safe place to live and roam around, even at night. This sense of safety adds to the appeal of the area, especially for families and retirees.

In terms of amenities and facilities, Dubrovnik Old Town is well-equipped. While the Old Town itself might have limited space for large facilities, it's well supported by the broader Dubrovnik area.

Hospitals like Opća Bolnica Dubrovnik provide medical services, and there are numerous schools, including international options, for families with children.

For shopping, while the Old Town has many boutique shops and local markets, larger shopping centers are located just outside the historic area.

Infrastructure quality in Dubrovnik Old Town is generally good, with well-maintained roads and reliable utilities. Internet connectivity is robust, catering to the needs of both residents and the many tourists who visit the area.

However, the historic nature of the town sometimes means infrastructure upgrades are carefully managed to preserve the area's heritage.

Accessibility is a significant advantage of living in Dubrovnik Old Town. The area is well connected to other parts of Dubrovnik and major transport hubs. Dubrovnik Airport, which offers international and domestic flights, is easily accessible.

Public transportation options include buses, which are the primary means of public transport connecting the Old Town with other parts of the city and the surrounding regions. The compact size of the Old Town also makes it highly walkable, which is a delight for those who appreciate leisurely strolls through historic streets.

Overall, living in Dubrovnik Old Town is about embracing a lifestyle that balances modern amenities with historic charm. It offers a safe, culturally rich environment with good connectivity and infrastructure, albeit with a higher cost of living.

For those drawn to its unique character, Dubrovnik Old Town provides an incomparable living experience.

How much does it cost to buy real estate in Dubrovnik Old Town?

If you need a detailed and updated analysis of the prices, rents and yields, you can get our full guide about real estate investment in Croatia.

Buying a property in Dubrovnik Old Town is an investment in both history and exclusivity. The types of residential properties available here vary, including apartments, traditional houses, and, less commonly, luxury villas.

Given the historic nature of the area, apartments, particularly those within renovated historic buildings, are prevalent and highly sought after. These properties offer the unique charm of living within walls that have stood for centuries, combined with modern amenities.

Properties in Dubrovnik Old Town are in high demand, especially those that offer views of the Adriatic Sea or are located near iconic landmarks like the Stradun, the main street.

The demand is driven not only by the historical and cultural significance of the area but also by its popularity as a tourist destination, which makes these properties attractive for both personal use and rental investments.

In terms of the market composition, Dubrovnik Old Town is predominantly characterized by resale properties due to its status as a UNESCO World Heritage site, which restricts new developments to preserve the area's historical integrity.

New construction is rare and, when it does occur, is subject to strict regulations to ensure that it blends with the existing architectural style.

The price range for properties in Dubrovnik Old Town can vary significantly based on factors like size, condition, and location. As a general guideline, prices per square meter can range from about €4,000 to over €10,000, reflecting the premium nature of this market.

These values have been on an upward trend in recent years, driven by the area's growing popularity and limited supply of properties.

Looking forward, there aren't many large upcoming developments or city planning changes announced that would drastically alter the Old Town's real estate landscape, given its protected status.

However, any minor alterations or improvements in infrastructure and amenities could positively impact property values.

Predictions for the real estate market in Dubrovnik Old Town in the coming years suggest a continued increase in property values. This projection is based on several factors.

First, the limited supply of properties and restrictions on new developments inherently drive up values. Second, the global recognition of Dubrovnik as a tourist destination and the appeal of owning property in a historic, culturally rich area continue to attract international buyers.

Lastly, as the world increasingly values unique and historically significant living experiences, properties in Dubrovnik Old Town are likely to become even more coveted.

For potential investors or homebuyers, these factors indicate that purchasing property in Dubrovnik Old Town not only offers the chance to own a piece of history but also represents a potentially wise investment choice, given the likelihood of value appreciation over time.

Where is the best area to buy a property in Dubrovnik Old Town?

Finding the best area to buy a property in Dubrovnik Old Town depends on what you're looking for in terms of atmosphere, property types, and investment potential.

The Old Town, being relatively small and enclosed within its famous walls, offers a variety of experiences in different parts.

One of the most sought-after areas is near Stradun, the main street of Dubrovnik Old Town. Properties here are at a premium due to their central location, proximity to major landmarks, and vibrant atmosphere.

The area is bustling with cafes, shops, and historical sites, making it ideal for those who enjoy being at the heart of the city's cultural and social life.

However, this also means that properties here are among the most expensive in the Old Town and can be quite busy, especially during tourist season. Another area to consider is near the city walls, particularly on the sea-facing side. These properties often offer stunning views of the Adriatic Sea, which is a significant draw.

The atmosphere here is slightly more relaxed compared to the central areas but still vibrantly alive with the essence of Dubrovnik. Prices in this area are also high, reflecting the desirability of the views and location.

For buyers interested in quieter, more residential areas, Ploče and Pile, just outside the Old Town walls, are worth considering. These areas offer a more tranquil living experience while still being within walking distance of the Old Town.

The properties here can offer a balance between accessibility to the Old Town and a more relaxed environment.

There aren't necessarily "up-and-coming" areas within Dubrovnik Old Town itself, given its well-established status and strict conservation rules.

However, the areas just outside the Old Town, like Ploče and Pile, have been gaining popularity. They offer a slightly different lifestyle while still providing close access to the historic center.

On the contrary, areas immediately around major tourist attractions, while offering an immersive historical experience, might not be advisable for those seeking peace and privacy. These spots can get crowded and noisy, especially during peak tourist seasons.

Moreover, properties in these areas might have restrictions in terms of renovations due to heritage preservation laws.

Here is a summary table to help you visualize better. If you need more detailed data and information, please check our property pack for Croatia.

Area	Atmosphere	Property Types	Price Range	Pros	Cons
Near Stradun	Vibrant, busy, central	Various, mainly apartments	High	Heart of cultural life, close to landmarks	Can be crowded, noisy
City Walls (Sea-facing side)	Relaxed, historic	Mostly apartments with views	High	Stunning sea views, quieter	Still busy during tourist season
Ploče and Pile	Tranquil, residential	Apartments, houses	Moderate to High	More peaceful, close to Old Town	Less central

Don't lose money on your property in Dubrovnik

100% of people who have lost money in Croatia have spent less than 1 hour researching the market. We have reviewed everything there is to know. Grab our guide now.

Is there a strong rental demand in Dubrovnik Old Town?

Dubrovnik Old Town is a hotspot for rental demand, with a strong inclination towards short-term rentals.

This trend is primarily driven by the area's popularity as a tourist destination, renowned for its historic charm and picturesque setting. The target demographic for these rentals is diverse, ranging from solo travelers and couples to families and groups of friends.

These visitors are often drawn by the allure of staying in a historic, culturally rich area, with easy access to local attractions, restaurants, and shops.

The profile of potential tenants is typically tourists seeking a unique and immersive travel experience. They tend to prefer properties that offer a blend of traditional architecture and modern amenities.

Apartments, particularly those that have been renovated to offer contemporary comforts while retaining their historic character, are highly sought after.

Additionally, properties that provide scenic views, such as those facing the Adriatic Sea or overlooking the city walls, are especially popular.

In terms of specific areas within the Old Town, those near major landmarks like the Stradun or the city walls are in high demand. These locations offer the quintessential Dubrovnik experience, combining convenience, history, and stunning scenery.

Properties in these areas can command higher rental prices due to their desirable location and the unique experience they offer.

Amenities that can help to reduce vacancy and attract more renters include modern and well-equipped kitchens, air conditioning, high-speed internet, and comfortable, stylish furnishings.

Features that enhance the overall guest experience, such as balconies or terraces with views, can also be significant drawcards. These amenities meet the expectations of travelers who seek the convenience and comforts of modern living in a historic setting.

In terms of potential returns on investment, properties in Dubrovnik Old Town can offer lucrative opportunities, particularly for short-term rentals.

While specific numbers can vary, properties in prime locations with desirable amenities can yield significant rental income, especially during the peak tourist season. The exact return on investment depends on factors like the property's size, condition, location, and the quality of amenities offered.

Properties that are getting more demand, and thus could potentially give better yields, are those that successfully combine historic charm with modern luxury. Renovated apartments in historic buildings, especially those with sea views or located near key tourist attractions, are increasingly popular.

These properties appeal to tourists' desire for an authentic and comfortable stay, making them a wise choice for investors looking to capitalize on the robust rental market in Dubrovnik Old Town.

Overall, investing in rental properties in Dubrovnik Old Town, especially for short-term rentals aimed at tourists, can be a promising venture.

The key to success lies in selecting properties that not only embody the historic and cultural essence of the area but also offer the modern amenities and comforts that today's travelers expect.

Make sure you understand the real estate market in Dubrovnik

Don't rush into buying the wrong property in Croatia. Sit, relax and read our guide to avoid costly mistakes and make the best investment possible.

Is it easy to buy a property as foreigner in Dubrovnik Old Town?

Before we answer the question, please know that we have an article dedicated to the experience of buying real estate as a foreigner in Croatia.

Buying property as a foreigner in Dubrovnik Old Town, or in Croatia generally, comes with specific considerations and steps.

While it's feasible, it's important to be aware of the regulations, risks, and best practices to ensure a smooth process.

Firstly, foreign buyers, especially non-EU citizens, may face certain regulations or restrictions. In Croatia, non-EU citizens typically need to obtain approval from the Ministry of Justice to buy property.

This process can add time to the property purchase and requires additional documentation. EU citizens, on the other hand, generally have an easier time as Croatia's entry into the European Union has simplified the process for them.

The purchasing process in Dubrovnik Old Town involves several steps, including finding a property, agreeing on a price, conducting a legal check on the property, signing a pre-contract, and finally, completing the purchase with a notary. One unique aspect of buying property in Croatia is the importance of ensuring clear property titles.

The history of ownership can be complex, and there have been instances of property disputes due to unclear titles. This makes conducting thorough due diligence essential.

The primary risks associated with property investment in this area include potential legal complications related to property titles, fluctuations in the real estate market, and managing the property if you're not residing in Croatia.

Additionally, given the historical nature of Dubrovnik Old Town, properties might be subject to conservation regulations, which can limit renovation possibilities and increase maintenance costs.

Common pitfalls for foreign buyers often include underestimating the bureaucratic process, neglecting thorough due diligence, and misjudging the total cost of purchase and ownership, including taxes, fees, and ongoing maintenance.

Unique to Croatia is the issue of 'presečište', a legal term referring to unresolved ownership claims on properties, particularly those that may have been confiscated during historical conflicts. This can lead to complicated legal situations, making the role of a local expert crucial.

Working with a local real estate agent and a lawyer is highly recommended. A knowledgeable local agent can provide insights into the market, help find properties that meet your criteria, and navigate local practices.

A lawyer is essential for ensuring the legal aspects of the purchase are handled correctly, especially in verifying property titles and navigating the approval process for foreign buyers.

Common exit strategies for property investors in Dubrovnik Old Town include selling the property for capital gains or renting it out, particularly for short-term holiday lets, which can be lucrative given the area's popularity with tourists.

Timing the sale to align with market highs can maximize returns, while a well-managed rental property can provide steady income.