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The real estate market in Split: 2024 forecast

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As we step into the year 2024, the real estate landscape in Split continues to evolve, presenting both challenges and opportunities for investors, homeowners, and industry stakeholders.

In this article, we will give you a clear picture of what's happening in Split's real estate scene for the year ahead.

If you need a full and more detailed report, with fresh data and actionable advice, please note that you can get our property pack for Croatia. This pack will also give you unlimited access to our team of experts, allowing you to ask them anything related to the housing market in Split specifically.

How's the Croatian economy doing?

Current state

The real estate market in Split, Croatia, is intricately linked to the country's economic and political stability.

Historically, Croatia has experienced a turbulent past, but in recent decades, it has shown significant progress in terms of economic growth and political stability, especially since joining the European Union in 2013. This stability has positively influenced the real estate market.

Focusing on the real estate market in general, it's seen as a growing sector, particularly in coastal areas like Split. The city's rich history, beautiful coastline, and status as a tourist hotspot make it an attractive location for property investment.

The housing market in Split, specifically, has been on an upward trend, with a steady increase in both property prices and demand. This is fueled by the city's popularity among tourists and expatriates, as well as locals looking for a high quality of life.

Government policies have played a pivotal role in shaping the housing market. For example, initiatives to promote tourism have indirectly boosted the demand for properties, as many homeowners turn to rent their properties to tourists.

Recently, there have been efforts to regulate this, ensuring a balance between tourist accommodations and residential needs.

Notable events that have impacted the market include Croatia's EU accession, which opened the market to EU citizens, and the global financial crisis of 2008, which caused a temporary slump in prices. However, the market has since recovered.

Recent regulatory changes in Croatia include more stringent requirements for energy efficiency in buildings and amendments in property tax laws. These changes aim to modernize the real estate sector and align it with European standards.

From a local perspective, Split is indeed an area where people like to invest in real estate. Its blend of historical charm, modern amenities, and stunning natural scenery makes it appealing.

The most sought-after areas are usually those close to the city center or the seafront, where properties offer both lifestyle and investment value.

For foreign investors, specific incentives include the potential for rental income due to the city's robust tourist industry.

However, drawbacks might include navigating the legal and bureaucratic processes, which can be complex and time-consuming.

Real estate prices in Split are generally higher than in many other Croatian cities but are often lower than in comparable Mediterranean destinations. This price difference makes Split an attractive option for those seeking a balance between cost and location.

Lastly, the legal framework surrounding real estate investment in Croatia is becoming more stable and transparent, aligning with EU standards.

However, it's advisable for investors, especially those from abroad, to seek legal counsel to navigate the intricacies of the local real estate laws and regulations.

Outlook and forecast

Split, a city renowned for its blend of rich history, stunning coastline, and vibrant cultural life, indeed possesses unique factors in its real estate market that distinguish it from other markets.

One of these factors is its strong appeal to both domestic and international tourists, bolstered by its status as a UNESCO World Heritage site.

This tourism appeal significantly impacts the demand for short-term rental properties, a sector that has been booming in Split.

When we talk about forecasting the economy and stability of Split, it's essential to consider its heavy reliance on tourism. This reliance can be both a strength and a vulnerability.

Given the current global trends and Croatia's stable progress in the EU, the outlook appears positive. The city's economy is likely to continue benefiting from steady tourism and foreign investment.

However, this forecast is cautiously optimistic, as global economic fluctuations and unforeseen events can impact tourist inflows.

Comparatively, Split has been experiencing faster growth than many other regions in Croatia, primarily due to its tourist appeal and coastal location. This growth is seen in the rising property prices and the increasing number of new developments.

Looking ahead to 2024, any anticipated changes in government policies that could affect the local real estate market are crucial to consider.

Potential areas for policy changes could include further regulations in the short-term rental market to address the housing needs of locals, environmental regulations affecting coastal properties, and possible amendments in property tax structures. Such changes would likely aim to balance the interests of investors, residents, and environmental concerns.

Specific improvements that suggest positive trends in Split include infrastructure developments, like enhanced transportation links and urban renewal projects. These improvements can increase property values and attract more investors.

Additionally, efforts to diversify the local economy beyond tourism, such as encouraging tech startups or other industries, could provide more stability and growth.

However, potential risks should not be overlooked. These include the city's vulnerability to economic downturns affecting the tourism sector, the impact of climate change on coastal properties, and possible regulatory changes that might make investment less attractive.

A sudden dip in tourism, for example, could lead to a decrease in rental income potential, impacting the real estate market's profitability.

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What about housing prices in Split?

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Current state

In Split, a city that melds historical charm with a stunning coastal setting, the trend in real estate prices over the past few years has been generally upward.

This upward trend reflects the city's growing appeal as a tourist destination and a desirable place to live. The demand for properties, especially in prime locations like the historic city center and areas close to the sea, has pushed prices higher.

Looking at how real estate prices have reacted to past economic crises or booms, it's clear that the market in Split, like many others, is sensitive to broader economic conditions. During economic downturns, such as the global financial crisis in 2008, there was a noticeable dip in property prices.

However, the city's market has shown resilience, bouncing back relatively quickly, a trend partly fueled by the steady demand from both domestic and international buyers.

Comparing current real estate prices to those a decade ago, there's a marked increase. A decade ago, the market was still recovering from the global financial downturn, and prices were lower.

Since then, the combination of Croatia's EU accession, increasing tourist numbers, and the city's growing reputation as a lifestyle and cultural hub has led to a significant appreciation in property values.

Currently, real estate prices in Split are either rising or stable, depending on the specific area and property type. There's no broad indication of a decline.

The types of properties experiencing the highest growth in real estate prices are often those in prime locations – properties in the city center, waterfront properties, and those in areas popular with tourists and expatriates. These properties are in high demand due to their location, the lifestyle they offer, and their potential for rental income.

The population change in Split has been an interesting aspect of its real estate dynamics. While the city's population has not grown significantly, there has been a demographic shift.

There's an influx of younger people, expatriates, and retirees attracted by the city's lifestyle, climate, and amenities. This shift impacts the types of properties in demand – with a growing preference for modern, well-located apartments and houses that offer quality living.

Specific factors causing these trends include Split's evolving status as a tourist destination, its lifestyle appeal, infrastructural developments, and its stable political and economic environment within Croatia and the EU.

These factors make Split an attractive place for both living and investment, driving up the demand and prices in the real estate market.

Outlook and forecast

In Split, a city celebrated for its historical allure and scenic beauty, the current state of real estate prices is being shaped by several economic and demographic factors.

These factors intertwine, painting a complex picture of the local real estate landscape.

One significant economic factor is tourism. Split's growing popularity as a tourist destination has led to increased demand for both short-term vacation rentals and property purchases by non-locals seeking holiday homes. This demand drives up property prices, especially in areas popular with tourists.

Another factor is foreign investment. With Croatia's integration into the European Union, Split has become more accessible to EU investors.

These investors often view Split as an attractive location for real estate investment due to its lower property prices compared to other Mediterranean destinations, leading to increased demand and higher prices.

Demographically, there's a trend of younger people and expatriates moving to Split, attracted by the city's lifestyle, climate, and amenities. This influx can increase demand for certain types of properties, such as modern apartments in central locations, thus pushing up prices.

Looking into the future, specific trends or events could lead to an increase in housing prices in Split. For instance, continued infrastructural improvements, like enhanced transportation links or urban development, can make the city more accessible and attractive, potentially boosting property values.

Additionally, if Croatia's economy continues to grow and stabilize, this could further enhance investor confidence, leading to increased demand and higher prices.

It's essential to note that these trends may not uniformly apply to all cities or regions in Croatia. Other areas might have different economic, demographic, or geographic dynamics influencing their real estate markets.

For example, inland regions or lesser-known coastal towns might not experience the same level of tourism-driven demand as Split.

Conversely, specific facts or trends could lead to a decrease in housing prices in Split. Economic downturns, either globally or locally, could reduce the number of tourists and investors, thus decreasing demand for properties.

Additionally, any significant changes in government policies, such as increased property taxes or regulations that make it less attractive to rent properties to tourists, could also negatively impact the market.

These negative factors, however, may not affect all regions in Croatia equally. Some areas might be more resilient to such changes due to different economic bases or less reliance on tourism.

For example, regions with a strong industrial base or those less dependent on foreign investment might not be as impacted by these factors.

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How's the demand for the real estate market in Split?

Current state

In Split, the demand for residential real estate has been robust, reflecting the city's growing appeal.

This demand is influenced by various factors including the city's popularity as a tourist destination, its cultural and historical significance, and its appealing Mediterranean lifestyle.

The market dynamic in Split currently leans towards there being more buyers than sellers. This demand is especially pronounced in certain areas of the city, such as the historic center, the waterfront, and other scenic locations.

These areas are particularly attractive to buyers looking for investment properties, as well as locals seeking to live in these desirable spots.

The supply of new housing is trying to keep up with this demand, but there are challenges. In historic cities like Split, there's limited space for new developments, especially in the city center and other sought-after areas.

This limitation means that new housing is often on the outskirts of the city or involves the renovation of existing buildings. These factors can contribute to higher prices due to the limited availability of desirable properties.

Buyers in Split are generally looking for properties that offer a blend of modern amenities and traditional charm. Waterfront properties or those with sea views are particularly in demand. There's also a preference for well-located properties that provide easy access to the city's amenities and tourist attractions.

Apartments in historic buildings are sought after, as are modern villas and homes in quieter, more residential areas.

Current interest rates for mortgages play a significant role in shaping the buying power and demand of consumers. Traditionally, higher interest rates can dampen buying power by increasing the cost of borrowing.

Conversely, lower interest rates can stimulate the market by making mortgages more affordable. These rates can significantly impact first-time homebuyers and those looking to invest in the property market.

Regarding recent changes in government policies or regulations, these can have a notable impact on the local real estate market. Changes could include adjustments in property taxes, which might affect the overall cost of owning a property in Split.

Subsidies for homebuyers, if introduced, could encourage more people to enter the property market, especially younger buyers or those purchasing their first home.

Zoning laws could also play a role, particularly if they influence the type of developments that can be built in certain areas of the city or how properties can be used (for instance, regulations around using residential properties for short-term tourist rentals).

Outlook and forecast

In Split, demographic shifts and cultural trends are playing a significant role in shaping the real estate market.

Understanding these shifts is key to grasping the current and future trends in this vibrant Mediterranean city.

One significant demographic shift is the aging population. This trend is seen in many parts of Europe, including Croatia. In Split, it influences the demand for properties that are more accessible and easier to maintain, such as smaller apartments or homes in central locations close to amenities.

There's also a growing demand for properties that can accommodate multi-generational living, as families adapt to care for elderly relatives.

Urbanization is another critical factor. As more people move to Split for its employment opportunities, lifestyle, and cultural offerings, there's increased demand for residential properties within the city.

This trend boosts the demand for apartments and townhouses, particularly those that offer modern amenities and are close to the city center or other key areas like business districts and universities.

Regarding household formation trends, there's been a shift towards smaller household sizes. This change is due to various factors, including economic considerations and lifestyle choices.

Consequently, there's a growing demand for one-bedroom and studio apartments, especially among young professionals and couples.

Real estate as an investment is also a significant trend in Split. The city's popularity as a tourist destination makes it an attractive location for buying properties to rent out in Split, especially short-term rentals for tourists.

This demand influences the types of properties being bought for investment purposes – properties in prime locations like the waterfront or the historic city center are particularly sought after for their high rental income potential.

Cultural trends also impact the housing market. For instance, the increasing awareness of environmental sustainability is leading to a rise in demand for eco-friendly homes.

These properties, which often feature energy-efficient designs and sustainable materials, are becoming more popular among a segment of buyers who are environmentally conscious.

Regarding the type of properties favored due to these trends, there's a noticeable inclination towards properties that offer a blend of traditional charm and modern amenities. Historic buildings that have been renovated to include contemporary comforts are highly prized.

Foreign investment plays a significant role in Split's real estate market. It creates additional demand, especially for high-end properties and those in prime locations.

This demand can drive up prices in certain areas. Foreign investors often look for properties that can serve as vacation homes or lucrative rental properties. In terms of restrictions or encouragements for foreign investors, Croatia's policies since joining the EU have generally been favorable towards EU citizens.

However, non-EU investors may face more regulations. These policies can either boost or slow the demand depending on the investor's origin.

Finally, niche markets in Split, such as luxury properties and eco-friendly homes, are experiencing unique trends. The luxury market, driven by both domestic and foreign high-net-worth individuals, seeks properties with exclusive features, like sea views or historic significance.

The eco-friendly market, though smaller, is growing, driven by increasing environmental awareness and a desire for sustainable living.

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How's the rental market in Split?

Current state

In Split, a city known for its blend of ancient charm and modern appeal, the rental market is dynamic and varied, influenced by its unique geographical and cultural landscape.

The current demand for rental properties in Split is robust, driven primarily by its status as a tourist hotspot and a desirable place to live for both locals and expats. This demand is seasonal, with peaks during the tourist season when short-term rentals are in high demand.

Regarding specific types of properties, apartments, especially in the city center or near the waterfront, are in high demand. These properties are popular among tourists looking for short-term rentals and locals or expats seeking long-term leases.

Single-family homes are also sought after, particularly by families or those looking for more space and privacy. Shared accommodations are popular among students and young professionals due to their affordability.

Tenants in Split have specific preferences when it comes to rental properties. Location is a key factor, with a high demand for properties in central urban areas close to amenities like shops, restaurants, and cultural attractions.

Size and amenities also play a role; many tenants prefer modern, well-equipped apartments that offer comfort and convenience.

Tenant preferences vary between urban, suburban, and rural areas. In urban areas, like the city center of Split, there's a preference for apartments that offer easy access to the city's lifestyle and amenities. In suburban and rural areas, tenants often look for larger properties, like houses with gardens, valuing space and a quieter environment.

The demographic characteristics of tenants in Split vary by region. In urban areas, you'll find a mix of young professionals, students, and expats, often looking for smaller, centrally located apartments.

Families and older residents might prefer suburban areas where they can find larger homes with more outdoor space. The rural areas around Split are less in demand for rentals, but they might attract those seeking a peaceful, natural setting.

Income levels and economic factors significantly influence the type of properties tenants rent. Higher-income tenants tend to rent larger, well-located properties with more amenities, while those with lower incomes might opt for smaller apartments or shared accommodations.

The economic situation also impacts the rental market; for example, in times of economic downturn, there might be a shift towards more affordable rental options.

Certain regions in Split have a high concentration of specific tenant groups. The areas close to universities are popular among students, while neighborhoods near business districts attract young professionals.

Tourist areas, like those near the waterfront or in the historic city center, are frequented by short-term tenants, including tourists and seasonal workers.

Outlook and forecast

The rental market in Split is influenced by a combination of factors, each playing a distinct role in shaping the current and future landscape of property rentals.

One of the primary influencers is tourism. Split's status as a major tourist destination means that short-term rentals, especially during the peak tourist season, are in high demand.

Properties located in or near tourist attractions, such as the historic city center and coastal areas, are particularly sought after for their proximity to landmarks and the beach.

Evolving lifestyles and work patterns, such as the rise of remote work, are also influencing rental preferences. With more people able to work from anywhere, there's an increasing demand for rentals that offer not just a place to live, but also a comfortable work environment.

This trend could lead to a higher demand for rentals with additional space for home offices, high-speed internet, and quiet, distraction-free areas.

Demographic changes, including an aging population and the movement of younger generations into urban areas, reflect distinctly in the rental market.

Older residents might prefer smaller, more accessible apartments, while younger renters often look for properties with modern amenities, convenient locations, and vibrant community life.

Emerging urban areas in Split are indeed becoming new hotspots for rental properties. Areas undergoing development or revitalization, perhaps previously overlooked, are attracting interest due to newer housing options, often at more affordable prices compared to the city center.

These areas can become particularly popular among young professionals and families looking for long-term rental options.

Technological advancements are impacting the rental market in several ways. Online rental platforms have made it easier for property owners to list and manage their properties and for renters to find and book accommodations.

Smart home technologies are increasingly becoming a selling point for rentals, with tenants seeking properties equipped with smart security systems, energy-efficient appliances, and home automation.

Sustainability and green living trends are also influencing the rental market. There's a growing interest in eco-friendly homes, which feature energy-efficient designs, sustainable materials, and green spaces.

This trend aligns with a broader societal shift towards environmental consciousness and could lead to an increase in demand for such properties.

The rental market forecast across various regions of Croatia varies. While coastal cities like Split experience high demand due to tourism, other regions may have different dynamics influenced by local economies, population density, and lifestyle preferences.

Urban areas are likely to continue seeing strong demand, while rural areas might appeal to specific demographics looking for a quieter, nature-oriented lifestyle.

The long-term outlook for the rental market in Split, considering these factors, remains positive but nuanced. The city's appeal as a tourist destination and its evolving urban landscape suggest a sustained demand for rentals.

However, this demand might shift in nature, with a possible increase in longer-term rentals due to remote work trends and a growing interest in sustainable living.

Finally, there are niche markets in Split, such as luxury properties and eco-friendly homes, experiencing unique trends. Luxury rentals, offering high-end amenities and exclusive locations, cater to affluent tourists and expats.

Simultaneously, the eco-friendly niche, though smaller, is growing, driven by increasing environmental awareness and a desire for sustainable living options.

Make sure you understand the real estate market in Split

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.

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This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.