The real estate market in Dubrovnik continues to experience an increase in residential property prices in 2023. Positive trends are becoming more prominent, but due to a lack of supply, properties are becoming less accessible for young families, both in the Dubrovnik area and other coastal cities and in Zagreb, according to Nada Burum, Vice President of the Professional Group of Real Estate Agents in Dubrovnik and a member of the Real Estate Business Association Council at the Croatian Chamber of Economy, reports Dubrovački Vjesnik.
She also reflected on the state of the market last year when investments in real estate were seen as a way to preserve the value of money amid increased inflation. Burum believes this was a smart move for those who were able to do so.
"The introduction of the euro in real estate transactions brought technical relief. Properties were purchased hastily due to the announcement of increased interest rates on housing loans. The post-pandemic period emphasizes the importance of quality living. Finally, the Croatian State Housing Agency (APN) is becoming a thing of the past! These are all new and changing conditions in which the real estate sector must operate. The values of older apartments will gradually align with reality, and their prices should not continue to rise at the same rate as new construction. The market will show the extent of differentiation," said Burum.
Rising real estate prices in Dubrovnik
In recent years, property prices in Dubrovnik have been rising at a higher rate than realized. Overall, prices have experienced a significant increase.
"It is important to recognize that market segmentation is gradually occurring in Dubrovnik. This is a new trend. Recently, prices of apartments have significantly differed based on factors such as the view of the sea and other characteristics, relative to the year of construction and preservation level. The arrival of foreign buyers, the lack of new construction projects, and an excellent tourist season are factors influencing this situation. Dubrovnik has entered a new phase. Considering the current dynamics of the global real estate market, Dubrovnik emphasizes its attractiveness as an investment destination," Burum said when asked why Dubrovnik is so appealing to foreign investors.
Based on her experience, luxury properties continue to be highly sought after. Although there are not many of them, especially in destinations like Dubrovnik, they attract financially ready buyers.
They are looking for luxury villas for private use and for high-end tourism, which is gaining more popularity on the Adriatic coast. These villas are rented at extremely high nightly rates. There has also been a significant change regarding building land; the interest has sharply increased, resulting in high prices for land near or with a sea view. Recently, EU citizens have been coming to search for properties where they can live in Dubrovnik for about half a year. They stay for a while, get to know the city, and confirm their intention to purchase real estate. They know exactly what they want.
“Dubrovnik is known as one of the most expensive cities in Croatia in terms of real estate prices, but it is influenced by various factors. Firstly, it is a historic and branded city. However, it has a great reputation among foreign investors for another reason: it is still cheaper than other globally popular destinations. Therefore, it is attractive to them both in terms of price and as a peaceful city where they often create a second home. Our office still records around 40% of foreign buyers, some of whom are Croatian emigrants," said Burum, the owner of IMB real estate agency.