December the 21st, 2022 - When it comes to purchasing Croatian property, there are (rather unsurprisingly) numerous things to note. Some of them are very, very important. From lawyers to the Ministry of Justice and zoning (read on, it will make sense eventually) - here's what you need to know.

First of all, foreigners are able to buy property in Croatia, with more and more of them snapping up real estate on the glorious Adriatic coast and using them as summer homes or indeed renting them out as a way to make back what is usually a heft investment. While this more than understandably bothers certain locals who have genuine fears about being outnumbered or priced out of where they come from, there is a healthy mix of foreign and domestic owned property up and down the coast and on the islands.

It isn’t a surprise that Croatia attracts so many foreigners (and their wallets), and while I’ve mentioned the natural pull of the sparkling coast, many foreign nationals also purchase apartments in Zagreb, quaint houses in the rolling hills of Gorski kotar, and even old cottages in far-flung villages. You don’t need to plan to move here at all in order to making purchasing Croatian property a reality and owning a little piece of this country, but you do need to keep the rules and some restrictions in mind before taking the plunge. 

Croatian nationals

If you’re a member of the Croatian diaspora, either living here or living abroad with zero intentions of packing your life into a few suitcases and moving here, and you have Croatian citizenship, you are of course treated exactly like anyone else who has the same document and has been born, raised, and is living in Croatia. There are no restrictions on what you can purchase or where, and you don’t need to seek any special permissions from anyone when it comes to purchasing Croatian property.

EEA/EU citizens

As an EEA citizen, you’re treated in the same way as a Croatian national would be. You’re free when it comes to purchasing Croatian property whether you live here or not. There is one catch, however, as EEA citizens cannot purchase anything listed as agricultural land, this is set out in the Law on Agricultural Land. 

What does that mean?

No foreign nationals can purchase agricultural land at this moment in time. This will expire in the future, with the date being pinned down at this moment in time as June 2023. This is currently the case (and has been ever since Croatia joined the EU) as part of a seven-year transitional period in which Croatia chose to maintain its restrictions on the sale of anything classed as agricultural land to foreign nationals. 

Until then, foreigners can purchase land listed as agricultural land if they open a Croatian company, list themselves as the owners, and purchase it through their Croatian company.

Third country nationals and British citizens

When it comes to purchasing Croatian property as a third country national, you’ve got more of a task on your hands. You’ll need to inform the Ministry of Justice and seek their consent before any property sale can go through. Be prepared to wait, it can take months. 

Once you do own a property, you can’t rent it out unless you open a Croatian company and do it through the company. This is costly and is absolutely not worth the hassle, time and potential problems you’ll likely run into.

The same rules apply to you in regard to the Law on Agricultural Land in that you cannot purchase it. You can’t purchase forested land, or any property considered to be a cultural monument. 

British nationals

'Can Brits purchase Croatian property?' is a question that I see often, and the answers provided are somewhat vague. Given that the United Kingdom is no longer an EU member state, British citizens are no longer EU citizens, meaning that certain rights which were once afforded to them merely by being the holders of British passports no longer apply.

Up until February the 1st, 2020, ironically just before the coronavirus pandemic reached Europe and caused havoc like we've never seen before, Brits could purchase property in Croatia as they were EU citizens. The same continued to be true between that aforementioned date and the 31st of December, 2020, during a transition period when all EU law continued to apply to the UK as it slowly made its way out of the bloc of which it had been a leading, powerful and wealthy member for over 40 years. 

During the UK's transition period out of the EU, British (and as such EU) nationals were free to purchase Croatian property without having to get any particular permissions and without having to engage in anything out of the ordinary. This applied to all property with the exception of what was classed as 'property and real estate in protected areas' and agricultural land. Then came January the 1st, 2021, and everything changed for Britain. That was the real D-Day, when the UK ceased to be a member of any kind of the EU, the transition period ended at midnight (Central European Time) on the 31st of December, 2020.

The answer to the question: Can Brits purchase Croatian property? was expected to change, but it didn't alter all that much. In short, yes they can, but that desired property absolutely needs to be classed as a residential property, and for that it must be in a certain 'zone'. This is all based on reciprocity agreements held between the Republic of Croatia and various other countries, and this functions in the British sense much like it did before Croatia joined the EU back in July 2013.

A tip for looking this sort of agreement up in Croatian would be to Google: Uzajamnost za stjecanje prava vlasništva na nekretninama u Republici Hrvatskoj.

It sounds a little bit complicated, but in reality it isn't. If a Croatian citizen can buy property in a certain country, then the citizens of whatever country that might be can typically do the same in Croatia, with certain conditions attached in each specific case. You also do not need to register as a resident of Croatia in order to buy a property here, as I mentioned at the beginning of this chapter.

So, what needs to be done?

Consent for the acquisition of ownership rights over Croatian property by foreign citizens who aren't nationals of the EU/EEA requires what everyone in Croatia just adores - an administrative procedure. A Brit intending to buy a property here must first make a request to the Ministry of Justice.

In the case of a British citizen who isn't protected by the Withdrawal Agreement wanting to purchase a property here, this procedure is conducted at their request to purchase real estate. That real estate needs to be 'zoned' as residential.

The procedure is laid down in the provisions of the Act on Ownership and Other Real Rights and the Act on General Administrative Procedure. A mouthful, I know. Any submitted application must be written and then be submitted to the Registry and Archives Department. This can be done by post to the following address:

Croatian: Ministarstvo pravosuđa i uprave Republike Hrvatske, 

Uprava za građansko, trgovačko i upravno pravo

Ulica grada Vukovara 49, 10000, Zagreb, Grad Zagreb, Republika Hrvatska

English: The Ministry of Justice and Public Administration of the Republic of Croatia,

The Directorate for Civil, Commercial and Administrative Law

City of Vukovar Street 49, 10000, Zagreb, Croatia

The following documents must be enclosed along with your (written) application form:

An acceptable legal basis for the acquisition of ownership (this can be a property purchase agreement, the deeds proving the property has been gifted to you, etc). These documents can be in their original form, or they can be certified copies.

Proof of ownership from the seller of the property, such as a copy from the land register confirming their ownership.

A certificate of the administrative body responsible for urban and physical planning, according to the location of the property, on the legal status of the property.

Proof of the prospective owner's nationality (such as a certified copy of their passport showcasing their citizenship) or proof of legal entity status (evidence with a copy from the court register) if the prospective owner is a foreign legal entity.

When the applicant is represented by an attorney-in-fact, the original power of attorney or a certified copy thereof must be submitted.

In certain cases, additional documentation will be sought from would-be buyers of Croatian property. It all depends on the individual request. 

So, in short, the answer to Can Brits purchase Croatian property? is a resounding yes, given that all of the requirements for reciprocity have long been met. This was of course helped not only by the UK's recent EU membership, but also by the fact that Croatia is the EU's youngest member state and that many bilateral agreements between the UK and Croatia before Croatian EU accession were long-standing and clear.

Check the property records

This is a very important step that needs to be taken when purchasing Croatian property. There are many properties in Croatia which are the subjects of ownership disputes and these can go on for donkey’s years, as they say in the UK. Doing your due diligence can help you avoid any unpleasant surprises as you go through the purchase process. You really, really don’t want to deal with any Croatian institution for longer than is absolutely necessary and the biggest wet blanket in the world would come in the form of inheriting a list of problems as long as your arm while trying to enjoy your new little slice of Croatia.

How do I check the public records for a property?

There are two ways to do this. One is by checking the Land Registry, or through Cadastre.

The information that you can access through these platforms are the purpose of the property you’ve got your eye (and maybe your wallet) on, the name(s) of the owners and certain pieces of information about them, such as their OIBs (although this isn’t always shown), where they live (or at least their registered addresses), the size of the property and any accompanying land, and if there are any ownership disputes or other problems going on.

Make sure your desired property is zoned as residential!

When purchasing Croatian property, you need to make sure your desired property is zoned as residential, and unfortunately this information isn’t freely available with a few clicks online. To find out how any particular property is zoned, you need to send a request to the Administrative Department for Construction and Physical Planning (Upravni odjel za graditeljstvo i prostorno uređenje).

If you are not a Croatian citizen, you’ll need to pay a small fee for this and you need to request a certificate stating the property’s zone as residential.

Things to note

Engage a lawyer when purchasing Croatian property. I cannot stress this enough. Don’t try to navigate these (sometimes, alright, often) murky waters without professional legal assistance.

Have your wits about you. If something seems too good to be true, it probably is. If your gut is telling you something doesn’t seem quite right, it probably isn’t. Ask, ask, and ask again. Then ask your lawyer three more times.

When it comes to purchasing contracts, it will usually be your lawyer (as the buyer) who prepares everything. Everything, including the terms of the purchase, will be very clearly outlined in order to protect you and your hard earned cash. You’ll need to visit a notary (javni bilježnik) to have copies of the contract notarised.

Your lawyer will explain all of the fees to you as you go through the process, as there are several that act as guarantees for both parties, as well as how to obtain the certificate of ownership at the end of the process.

For more on How to Croatia, make sure to check out our lifestyle section.

December 8, 2022 - The Croatian real estate market is behaving in interesting ways. The difference between the requested and realised real estate prices is increasing, and is currently reaching around 15 percent, which means that the owners' demands are not always realistic, especially when it comes to used real estate, it was pointed out on Wednesday at the 34^th Real Estate Business Forum.

As Index writes, the forum was organised by the Real Estate Association of the Croatian Chamber of Commerce (HGK). As the president of that association, Dubravko Ranilović, said, it is not yet possible to say with certainty what the next year will look like, but he believes there will be a change in trends.

"There will be a certain slowdown in the real estate market; prices cannot rise indefinitely in this way," said Ranilović.

The economy of the EU, including Germany, is slowing down due to the crisis and heading towards recession, interest rates are rising due to inflation, and given that more than a third of real estate buyers in Croatia are foreigners, this will be reflected in the Croatian market in the next year, he assessed.

Ranilović stressed the importance of differentiating the Croatian market, with the coast largely dependent on foreigners, and the rest mainly on Croatian customers.

Regarding foreign buyers, the data of the Tax Administration show that, since last year, there have been a total of 31,361 sales of houses or apartments, 9,491 of which were sold to foreign buyers.

From July 2021 to June 2022, foreigners bought 12,518 residential properties in Croatia, or 36 percent of the total. With 3,501 purchased properties, Germans are in the lead, followed by Slovenians with 3,090. The number of real estate sales to foreigners is constantly growing, and Ranilović pointed out that in some cities in the coastal counties, it exceeds 90 percent.

The phenomenon of "neighbour's optimism"

When it comes to the overall state, Ranilović pointed out that the requested prices of real estate are growing at significantly higher rates than realised prices, which means that the prices and demands of owners are not realistic everywhere, which especially applies to used real estate. Moreover, the difference between the requested and realised prices is increasing, and according to some estimates, it already reaches close to 15 percent on average while at the beginning of the year, it was only ten percent, pointed out Ranilović. Some call this phenomenon "neighbour's optimism," in the sense that it is difficult for someone to give up an amount that they heard someone else achieved, he added.

When it comes to apartments, for example, data from the real estate market for 2021 show that the requested price per square meter for apartments in Croatia was 2,197 euros, and the achieved price was 1,731 euros. At the same time, the average realised price per square meter for apartments in Zagreb was 1,847 euros last year, an 2,047 euros on the coast.

New build leads in prices, where quality properties in good locations are sold quickly, but what is being built is not enough to satisfy needs. On the other hand, used real estate is not up to standard; therefore the existing housing stock, which is generally poor, that is, insufficiently maintained, should be significantly improved, Ranilović said.

"The aim of the profession is for the market to move within as realistic a framework as possible"

He explained that the asking price is the subjective opinion of the owner about the value of the property, so if the market "goes down", only those who have to sell will first sell at lower prices, while it takes six months to a year for others to correct their prices. "People will have a hard time accepting reality. That's just the way it is," asserted Ranilović.

He told the large number of people gathered from the real estate sector at the Westin Hotel, more than 700 of them, that they should be a "real stabiliser of the real estate price market," and not "flatter the owners" to further encourage price growth and "inflate the bubble." "The more that bubble inflates, the more difficult it will be for us later," said Ranilović.

As some good news, he cited the growth in the number of construction land transactions, which last year was 19.6 thousand, considering that this also assumes future business activity.

The adviser to the president of HGK, Josip Zaher, said that the goal of the profession is for the market to move within as realistic a framework as possible, in order to mitigate the consequences of a possible slowdown and to avoid a repeat of the 2008 crisis. He pointed out that as a result of the present inflation, the prices of construction materials and labor have also increased, so the prices of real estate have also increased significantly.

He reported that in 2021, around 135,000 transactions, worth more than HRK 60 billion, were realised on the real estate market.

State Secretary in the Ministry of Economy and Sustainable Development Nataša Mikuš Žigman pointed out that last year's value of real estate transactions accounted for 14 percent of GDP, which testifies to how "vibrant and alive" the real estate market is.

Housing affordability is a growing problem

Member of the council of the Real Estate Business Association HGK and owner of the Zagreb West agency Lana Mihaljinac Knežević stated that, in case of continuation of the current macroeconomic trends, in the next year "price stabilisation can definitely be expected".

Concerning new builds, considering that the offer is not sufficient, there should not be any major changes, while for old buildings, especially in Zagreb and on the coast, owners are expected to change their expectations and lower the asking prices, Mihaljinac Knežević pointed out.

She said that the affordability of housing in Croatia is becoming an increasing problem, and therefore a systematic strategy is needed, and there have been announcements of such projects in Zagreb.

Agricultural land is the most traded real estate product, and further growth of such transactions is expected because the moratorium on the purchase of agricultural land by EU citizens ends next year, said Mihaljinac Knežević.

For more, make sure to check out our dedicated Lifestyle section.

October the 4th, 2022 - Four Croatian cities boast the most expensive property prices when looking at square metre costs, and the City of Zagreb isn't among them.

As Poslovni Dnevnik writes, to begin with, it's worth noting that the Republic of Croatia's real estate turnover last year amounted to a massive 60 billion kuna, which is a whole 20 billion kuna more than it amounted to back in 2020. The number of sales was also 30 percent higher. The highest price per square metre - coming in at more than two thousand euros - was achieved by property sellers in four Croatian cities: Dubrovnik, Rovinj, Split and Opatija, while in the City of Zagreb the average price per suqare metre was 1,600 euros.

It is particularly interesting that almost half of the properties were bought with cash, and when we talk about the possibility of buying real estate, residents of the coast are the least likely of all to be able to actually afford property.

This interesting data was commented recently on HTV's Dnevnik by economic analyst Luka Brkic from the Libertas University, who said that people, especially in turbulent, uncertain times, try to escape with their assets to safer harbours - and one of the anchors definitely comes in the form of purchasing real estate.

Brkic also said that APN's loans further stimulate the demand for apartments, and then the price increases follow.

"It's also possible to go into slightly more speculative waters and say that a large part of property that is bought with cash has speculative characteristics and attributions, that is, that it is possible that it is a matter of some percentage of money laundering," said Brkic, claiming such things can never really be ruled out.

Brkic added that some Croatian and international research estimates show that the shadow economy which is very much present here in Croatia could be worth slightly less than 30 percent of GDP. This is an absolutely enormous amount of money that does not end up in the tax system at all, he noted.

"This is something that is definitely a problem. Whether it is a third now or not we can't be sure, but whatever the figure is - it's definitely much too high," he warned.

For more on property prices in different Croatian cities, make sure to check out our dedicated lifestyle section.

August the 2nd, 2022 - More and more would-be buyers are seeking out land on which they can construct something for themselves as Croatian property prices continue to soar to extremely high levels.

As Poslovni Dnevnik writes, Croatian property prices and their constant increases are apparently unstoppable at this moment in time, but despite the wildly overpriced square footage, demand is far from abating. In addition to houses and apartments, in the last two years ,there has been a significant increase in interest in building land, as reported by HRT.

For two years, Stefano Ladavac intensively searched for construction land in the very heart of Istria. The offer is weak, and the prices have never been higher, he claims. He now considers a plot of land in Sveti Petar u Sumi perfect for the construction of two villas that he will rent out when they're completed.

"We're absolutely satisfied with the price we got, we paid 22 euros per square metre, and approximately the initial average price of construction land in Sveti Petar u Sumi is 40 euros per square metre, so we did very well in that regard,'' said investor Stefano Ladavac.

There isn't much choice to pick from in the City of Zagreb either. The seller of land near the capital's Franjo Tudjman International Airport is asking for 65 euros per square metre. The price is dictated by the market, and according to the market as it is at the moment, that price is very realistic. At the same time, it is twice as high as it was when the construction land was purchased six years ago.

Cheap borrowing encourages buying, and with the current inflation rate as it is, money invested in property will not lose value. Building plots are most in demand in the cities of Zagreb, Split and Zadar, and Croatian property prices for all types of building are at record highs.

"I don't see a situation in which Croatian property prices will come down in the foreseeable future. The market is active, so I think it will continue in this way, given the country's imminent entry into the Eurozone," said real estate agent Mia Vucic.

The latest data from Eurostat shows that Croatian property prices increased by thirteen and a half percent in the first three months of this year alone when compared to the same period last year, which is above the European Union (EU) average.

For more, make sure to check out our dedicated lifestyle section.

ZAGREB, 8 July 2022 - Real estate prices in the European Union and the euro area in Q1 2022 saw the highest increase in more than 15 years, and in Croatia their growth was above the European average, a report by the European statistical office has shown on Friday.

In Q1 2022, real estate prices in the EU rose by 10.5% year-on-year, the largest increase since the end of 2006. At the end of 2021, they went up by 10.1%.

In the euro area, real estate prices rose by 9.8% in Q1 2022, which is the largest increase since 2005, when Eurostat started publishing data. In Q4 2021, the prices went up by 9.4%.

All EU member states, for which data were available, saw a year-on-year increase in prices in Q1 2022, and 17 of them saw a two-digit growth rate.

Real estate prices increased the most in the Czech Republic (+24.7%), followed by Estonia (+21%) and Hungary (+20.6%).

In Croatia, real estate prices went up by 13.5% y-o-y in Q1 2022. In Q4 2021, they increased by 9.1% y-o-y.

The increase in real estate prices was the smallest in Cyprus (+1.1%), followed by Finland (+4.3%) and Italy (+4.6%).

Eurostat did not have the data on Greece.

Acceleration in Croatia

In the period from January to March, price growth in the EU was stable, 2.1%.

In the euro area, it slightly decelerated, from 1.9% in the last three months of 2021, to 1.7% at the beginning of this year.

All members saw a quarterly increase in real estate prices, with Estonia recording the largest increase (+7.1%), followed by Hungary (+6.7%) and Bulgaria (+5.2%).

In Croatia, real estate prices in Q1 2022 rose by 5% from Q4 2021, when they went up by 2.5%.

The smallest quarterly increase in real estate prices was registered on Malta (+0.4%), followed by Cyprus (+0.5%) and Germany (+0.8%).

April 27, 2022 - Last year, foreign citizens bought 9,514 properties of real estate in Croatia, which is a high increase of 50 percent compared to 2020.

According to research done by Jutarnji List with information from the Croatian Tax Administration, the highest year-on-year growth in the purchase of real estate in Croatia among foreigners was achieved by citizens of Germany, Austria, and Slovenia, reports tportal.hr.

Last year, German citizens bought 2,637 properties in Croatia, which is an increase of 1,089 sales or even 70 percent compared to 2020, Austrians made 1,109 purchases (472 more properties or an increase of 74 percent compared to 2020), while Slovenians last year became the owners of 2309 properties in our country, achieving an increase in purchases compared to the previous year by 32 percent or 550 more properties.

"The data do not show the total purchase and sale of real estate in 2020 and 2021, but only the sale of real estate for which the Tax Administration conducted the procedure of determining the tax base. In addition, data on real estate sales are still being updated ", they note in the Tax Administration and suggest that, in the end, the growth in the number of real estate sales made by foreigners with sellers in Croatia could be even higher.

In any case, the registered growth of foreigners' demand for domestic real estate confirms the recent allegations of entrepreneurs and real estate market experts who told Jutarnji list that the increased interest of foreigners in domestic real estate is one of the reasons for unprecedented growth in new apartment prices in the last quarter of last year.

Namely, according to the Central Bureau of Statistics, the purchase prices of new dwellings in the last quarter of last year were 15 percent higher than the prices realized in the last quarter of 2020: such growth has not been recorded in the last decade. In addition, the average prices of all residential real estate purchases in 2021 were 7.3 percent higher than in 2020.

For more, check out our business section.

In addition to real estate prices, rental properties have also risen sharply, especially expensive properties such as villas and luxury hotels.

April 22, 2022 - Another round of applications for the APN subsidies ends today. Croatia's State Real Estate Agency (APN) say that they have never received more applications, almost five thousand, but it remains uncertain if all of them will receive the subsidies. Demand is growing, and the rise in housing prices which is directly linked with the provision of subsidies does not help either.

As SiB writes, there aren't that many apartments, while potential buyers are numerous. For a few years now, the demand for apartments has been just as wild as the rising prices of these precious square metres. 

"For what was the price of a two-bedroom apartment a year ago, now you can only buy a one-bedroom apartment. In Zagreb, the average price per square meter is 2,300 euros, in Rijeka 1,900, in Split 3,000, and in Osijek 1,050 euros," shared Luka Prica, the owner of a real estate agency, with RTL.

Less than 24 hours remain until APN applications are closed. A record 4,870 requests were received, and funds are limited, with HRK 50 million provided.

First come, first serve
"All the applications that were submitted in time, up to the request number 4,100 if all documents are complete, will be processed and approved accordingly", said Goran Golenić, assistant director of APN.

In previous years, it never happened that someone did not receive the subsidies, but APN warns - we can not guarantee that it will be the same this time around. Those who have submitted their applications first are at an advantage. So far, 2,462 applications have been approved in this round.

"When the funds are spent, we will inform the competent authorities and make decisions on further actions accordingly," Golenić claims.

Better days with cheaper square metres, it seems, are not in sight.

"We are entering the Eurozone, inflation has been announced, we are witnessing an increase in the prices of materials and labor - we cannot expect a drastic drop in prices," Prica claims.

Surely, the new round of APN subsidies announced for next year will come in handy for many.

For more, check out our lifestyle section.

ZAGREB, 29 Nov 2021 - The proportion of foreign nationals among property buyers in Croatia was 14 percent in 2010, while last year one in four real-estate buyers was a foreigner, Večernji List newspaper wrote on Monday. 

In the last 10 years, 314,000 residential properties have been sold, with the number of flats and holiday apartments sold ranging from 23,000 in 2020, which was their lowest number, to nearly 40,000 in 2010.

Foreign nationals have an increasingly important role in the real estate market as they have purchased 60,000 flats and holiday apartments in the last 10 years. While the proportion of foreigners among buyers was 14 percent in 2010, last year every fourth buyer of a flat or a holiday apartment was a foreign national, Večernji List said.

In 2020, foreign nationals bought four in ten properties sold in Istria County, three in ten in Primorje-Gorski Kotar County, one in four in Zadar County, one in five in Dubrovnik, and Šibenik, and 16 percent of the properties sold in Split-Dalmatia County.

In continental Croatia, the proportion of foreign nationals among real-estate buyers was around 2 percent in Međimurje and Varaždin Counties and was negligible elsewhere.

The eastern Slavonia region expects to see a surge in the number of foreigners after July 2023 when the ten-year ban on the sale of agricultural land to foreign nationals expires.

Last year, about 34,000 agricultural plots were sold for slightly less than HRK 1.5 billion, at the average price of about €3,300 per hectare. The price of farmland per hectare in Croatia is six times cheaper than in neighboring Slovenia and 13 times cheaper than in Italy. A hectare of arable land costs about €4,700 in Hungary and about €5,000 in Romania, the newspaper said.

"Whoever buys land in Slavonia, not for speculative reasons but to engage in agricultural production, will face the problem of labor shortage, because we do not have enough people even to pick apples," Željko Lovrinčević, an analyst at the Zagreb Institute of Economics, was quoted as saying.

He said that many people have become experts for grants and are adjusting to the tender terms in order to invest as little as possible and get as much money as possible without considerably increasing production.

For more news about Croatia, click here.

ZAGREB, 11 Nov, 2021 - The average monthly housing loan installment for people who took out the loan between November 2020 and June 2021 ranges from 41 to 44% of their monthly income, according to a Croatian National Bank survey, Večernji List daily said on Thursday.

Housing loans total HRK 67 billion, up by over 10% year on year.

The high demand for real estate is accompanied by a constant rise in prices, which are up by six to seven percent. At this rate, the price of a square metre of a flat could double in ten years' time.

"Croatia is a country with too many motives for the high demand for properties, from the tax treatment, tourism and low interest rates to the moving of the capital of the extra rich from banks, the APN (Croatian Real Estate Agency), the fact that some indeed need a place to live, that some buy properties in companies' names to pay less taxes, and the presence of foreigners," Maruška Vizek of the Zagreb Institute of Economics told the daily.

"The market can't offer enough properties for so many motives for there to be a drop in prices. The only solution is an adequate tax treatment, which won't happen," she added.

The central bank is worried about potential risks and that the crisis might spill over to the banking sector. Governor Boris Vujčić said recently the prices of housing properties were increasing more than incomes but not construction costs. All of that increases the risks of their corrections in future.

Most of the new housing loans (28% of the principal) are paid out with debt-to-income ratios of 30 to 40%. For another 26% of debtors, the ratio is 40 to 50%. For as much as 23% of the new housing loans, the monthly payment is more than half the debtor's income, Večernji List said.

For more on lifestyle, follow TCN's dedicated page.

For more about Croatia, CLICK HERE.

ZAGREB, 9 July 2021- In 2020, there were 103,000 transactions on Croatia's real estate market, or 7.7% fewer than in 2019, probably due to the COVID-19 pandemic to some extent, however the total value of real estate reached HRK 40 billion, 0.5% higher than in 2019.

The value of real estate transactions was equivalent to 11% of Croatia's Gross Domestic Product, and these figures were outlined at a news conference held in Zagreb on Friday on the occasion of the presentation of the annual publication "Croatia's 2020 Real Estate Market Overview", prepared by the construction and physical planning ministry and the Zagreb Institute of Economics (EIZ).

The ministry's state secretary, Željko Uhlir, said the residential real estate segment had the largest share in the market in terms of value of transactions, however most transfers were on the market of farmland and construction land and plots.

Every one in three transactions (33.3 %) were on the farmland market, and 16% of all transactions were sales of construction land.

Commenting on price rises, Ivana Rašić of the EIZ said that in 2020, the biggest increase in prices when it came to the real estate market were registered in the Adriatic counties of Croatia and in the capital city of Zagreb.

"The median flat price per square metre for the whole of Croatia was approximately HRK 9,600 in 2020," she said.

In Dubrovnik, for instance, the median flat price was HRK 19,000 per square metre and in Zagreb about HRK 11,000, she added.

Demand for new residential properties rose across the country, however houses in Zagreb, Split Rijeka, Pula and in their environs were also in high demand, Rašić said.

For more on business, CLICK HERE.