The allure of Croatia's real estate market, which captivated 9,515 foreigners last year, is experiencing a notable downturn in 2023, with the number of foreign buyers plummeting to less than 7,400. The retreat is marked by a cautious approach from international investors, signalling potential concerns over economic conditions and ongoing increases in property prices, reports Poslovni dnevnik.
According to data from the Tax Administration, foreign investors have acquired 25% fewer properties in Croatia compared to the previous year, highlighting a substantial shift in market dynamics. This decline is particularly pronounced given the robust activity observed in 2022 when 9,515 foreigners chose to invest in Croatian real estate.
The properties of choice for these international buyers predominantly include houses and apartments nestled along the picturesque Adriatic coastline. While many new owners utilize these properties for personal vacations, a significant number also engage in renting, seeking additional avenues for income.
Germany, Slovenia, Austria, the Czech Republic, and Slovakia emerge as the primary sources of foreign property buyers in Croatia. For these investors, Croatia represents an appealing prospect, offering both a potential return on investment through resale and a steady income stream from property rentals.
However, the cautious stance adopted by foreign buyers can be attributed, first and foremost, to economic uncertainties in their home countries. The ongoing surge in real estate prices within Croatia further contributes to this hesitancy. Over the last eight years, from 2015 to the present, real estate prices in various regions of the country have witnessed a significant doubling.
In the first half of this year, average prices for new apartments in Zagreb soared beyond 2,600 euros per square metre. Similar price trends are observed along the Adriatic coast, making properties in Kvarner, Istria, Dalmatia, and Zagreb still comparatively more affordable than in numerous Western European cities.
As Croatia navigates these shifts in its real estate landscape, the coming months will unveil whether the caution exercised by foreign buyers is a temporary adjustment or indicative of a more enduring trend.