Croatian real estate market POST-COVID 19 tendencies

2020 summer season was quite unusual for Croatia, most of traditional property market patterns were broken.

It started with earthquake in Zagreb of March 22 when over 1900 buildings became uninhabitable and over 26000 were damaged. This created a great shortage at residential and commercial market in Zagreb. Prices for apartments rose 15% during several months starting from March 22d. The situation is aggravated by the fact that Zagreb is a capital of Croatia and a place of trading, industrial, logistics facilities concentration, many of them do not correspond to modern seismic safety requirements. As a result 2020-2021 is a right time for investors to invest in construction in Zagreb. There are lots of new projects now and this direction will be booming over next few years. This is a chance to turn Zagreb into modern, innovative capital, new Manhattan.

Another surprise for May-June 2020 was a double in number of requests in real estate and clients. After several months of forced isolation in their flats in the cities, the clients from Germany, Austria, Poland, Hungary rushed to the sea to breathe fresh air and finally relax. Due to air flights limitations, this year they could not travel to Caribbean destinations, Thailand, Cyprus, Malta, Canary islands. They realized that can go to the sea mainly by car.

Italy and Spain were heavily blacklisted due to high COVID-19 figures, France could not demonstrate positive situation either, so Croatia with the number of infected, which was measured by only dozens throughout the country, not even hundreds, became more than attractive.
Croatia could offer rural vacation with low concentration of people, as there are no large cities in Croatia at the seaside. For example, Split, the largest city of the coast, has a population of 178 000 people. For comparison, in Nice (France) there are well over 500 000 permanent inhabitants. Most of Croatian towns are smaller places of no more than 10 000 people living there in private houses mainly.
There are no huge apart-condominiums with 100-200 flats like in Miami. Typical Croatian apart-building offers 8-15 flats only. Urbanization level is quite low in general. This is why Croatia suddenly headed the list of most demanded destinations as a ecological and COVID-free paradise.

New tendency of 2020 is that self-standing villas and houses became more popular both for renting and buying than apartments. People wanted to stay isolated, with no people around, to cook at their own kitchens, to swim in their own swimming pools.

Two requests were on the top of the list: “self-standing villa with pool in Istria peninsula (North of Croatia) up to 300 000 - 350 000 eur” and “seafront villa in Dalmatia up to 1,5-2 mln euro”. People who used to travel on their own private yachts did not cancel their vacations this year and they were choosing luxury villas with boat mooring places to buy.

Another novelty was that Croatian islands which were considered more difficult to reach and more expensive to live on before, suddenly became very attractive. Robinson-type villas and houses in Croatia on a large plot of land on Korcula, Solta, Hvar Drvenik, Sipan, Mljet islands were even more popular than luxury villas on the mainland. This was quite new and unexpected. Vicinity of infrastructure and airport became now rather a disadvantage than a benefit.

However, in late August 2020 Croatia was put in a so-called “red-zone” which meant that any people returning from Croatia to Germany or Austria had to stay on 14-days quarantine. This made hundreds of potential Buyers postpone future visits till November-December. Due to this ban, many deals were not finalized and prices at the coast dropped 4% during first 9 months of 2020 to be compared with 2019. Prices will continue to fall as touristic season in Croatia this summer was far from being very successful. Real estate specialists give the prognoses of lowest property prices in January-February 2021.