The Croatia takeover of the six-month rotating presidency of the European Union has not impacted the real estate rental market in Zagreb the way many had expected, at least in terms of renting out high-priced attractive apartments in the center of the city and nearby areas.

Very High Zagreb Expectations Have Fizzled

As reported by ZagrebInfo on December 2, 2019; several Zagreb landlords had evicted their long-term tenants to cash in on higher Western EU monthly rental prices, leaving their stunned evicted tenants to scramble for alternative housing. Unfortunately, that much-hyped cash cow has failed to produce any real milk.

Realtors and Zagreb Landlords Surprised by Lack of Interest

 “Expectations were very high, and many Zagreb residents have been calling us off the hook. They’ve eagerly left their information and addresses, and emphasized that they would move out of their apartments in top city locations immediately if they could rent them out for a half year, but there hasn’t been any interest. Seduced by the thought of a possible apartment shortage in Zagreb during the EU presidency, some owners even preemptively raised their rental prices,” observed Lana Mihaljinec Knežević, owner of Zagreb West Agency.

Boro Vujović, Director of the Opereta agency confirmed similar observations.

“The owners long-term apartment rental properties had big expectations, but nothing significant has happened. We have only rented two apartments for this purpose (EU government officials),” Vujović revealed to Korana Sutlić/Novac/Jutarnji List on January 12, 2020.

Zagreb West Agency

Croatia EU Administration Run Locally: Guests Not Long-Term

Lana Mihaljinec Knežević explained that the administration associated with the rotating presidency is run from Croatia with domestic resources. The guests who arrive from other EU states are not permanent guests, but occasionally show up to attend various meetings, summits and similar events.

Several apartments were reserved in the center of the city for these occasions, but nothing significant has happened for quite a while. These rentals (for EU government officials) can be counted on just one hand.

“For the time being, we just haven’t seen any interest in this area. We certainly expected interest, but nothing has happened. And we do not see an increase in the number of reservations compared with last year,” said Igor Kordić, co-founder of Irundo, a leading short-term rental company in Croatia. They handle several apartment rental properties in the center of Zagreb.

Hilton Double Tree Gets Fifth Star for EU Arrivals

Five Star Hotels in Big Demand: One Hotel Gets Fifth Star

Shortly before the beginning of the EU presidency, several ministries sought five-star hotels in Zagreb for short-term guest accommodations. For this reason, some hotels recently underwent upgrades, like the Hilton Double Tree Hotel, which became a five-star hotel.

HUP Zagreb indicated that highest category hotels, including The Westin Zagreb and Sheraton Zagreb, have generated the most interest during Croatia’s EU presidency. They are both reporting a high occupancy rate during the this 6-month period, as are their other high category hotels: Panorama Zagreb and International.

“Our hotels have a highly capable team of professionals who have hosted numerous international conferences and summits for many years, and our hotels, restaurants and conference halls are prepared for these upcoming events. Regarding our presentation of Croatia’s gastronomic options, we will be preparing special menus for the EU delegates to showcase our diverse selection of cuisine,” says Sara Valentić of the Marketing Department from the Croatian Consulate General in Zagreb.

Four Star Downtown Hotels Seeing Very Little Traffic

However, not all high-category hotels in Zagreb are in the same situation.

“We have not yet encountered any interested guests associated with the EU Council Presidency. It’s possible that one of them could occasionally stay with us for a short time, but we are not seeing that right now,” said Tomislav Kuliš , Director of the Palace Hotel, a four-star hotel located on Zrinjevac Park, right in the heart of the Croatian metropolis.

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A big cash cow will be coming to Zagreb early next year, just after Christmas, when thousands of European diplomats and officials who need accommodation will arrive in the city for Croatia's six-month EU Council presidency.

Up to 30,000 EU Officials Expected

According to Deutsche Welle, official sources are saying that about 25,000 people will descend on Zagreb in early 2020, while other estimates say that the figure will be closer to 30,000. Many won't be staying in Croatia for the entire six months nor will they all be arriving at the same time. In any case, this is creating real chaos in the tenant world. Simply put, Zagreb landlords can earn more by expelling their current tenants and renting their apartments to EU officials.

Zagreb does not have many hotels. In fact, Jutarnji List notes that there are only 24 four or five-star hotels in the city, which is by no means enough capacity to accommodate the large number of high-level diplomats and EU officials arriving soon.

Zagreb Landlords Are Evicting Tenants

Stanka, a student from Zadar, experienced the nightmare of moving because of the upcoming EU Council presidency, according to Zagrebinfo on December 2, 2019. She had just moved to Zagreb to pursue her college degree.

“My landlady bought my apartment and acquired me with the inventory. During our negotiations, she indicated that she would be upgrading the furniture and raising the rent. She also disclosed that we would not be signing a lease because she had plans to rent the apartment to diplomats in early 2020 for a much higher price. However, then she decided to completely renovate the apartment prior to their arrival, so I had to move out in September,'' the student reported, and claims she had less than a week to move everything out of an apartment where she had lived for only three months.

With the boom in Zagreb tourism over the last few years, a sizeable chunk of apartments which used to be rented monthly, are now being rented out to tourists by the day. This has greatly increased the average apartment rental rates.

“Of the approximately three and a half thousand who are officially registered, there are perhaps ten thousand available beds. And I believe that a large portion of this housing pool is ready to respond to the demands of the Eurobureaucrats," said Zoran Dragun, administrator of the Zagreb Private Landlords Association to Jutarnji list.

He claims that Zagreb has now become a year-round tourist destination, but also believes that rents in Zagreb have not increased as much as publicly reported. The current focus for private landlords is Advent (December); then they'll begin preparing for the big EU opportunity.

No Tenant Rights

Nedjeljko Marković, president of the Pragma social association, has a different opinion.

"The unpredictability of market movements is our biggest problem, because nobody in Croatia oversees these changes. We simply do not have any public housing policies,” he emphasized while referencing the unfortunate circumstances that many Zagreb tenants will soon face.

He claims that his sources from the association, which deal with tenant issues, have already received reports that scores of Zagreb tenants are facing eviction, and will soon be without a roof over their heads due to the arrival of EU bureaucrats and diplomats.

For more information on the housing situation in Croatia, check our our Lifestyle page here.