The 2020 summer season was quite unusual for Croatia, most of the traditional property market patterns were broken.
It started with the earthquake in Zagreb on March 22 when over 1900 buildings became uninhabitable and over 26,000 were damaged. This created a great shortage in the 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 the capital of Croatia and a place of trading, industrial, and logistics facilities concentration, many of which do not correspond to modern seismic safety requirements. As a result, 2020-2021 is the right time for investors to invest in construction in Zagreb. There are lots of new projects now and this direction will be booming over the next few years. This is a chance to turn Zagreb into a modern, innovative capital, new Manhattan.
Another surprise for May-June 2020 was a double in a 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, and Hungary rushed to the sea to breathe fresh air and finally relax. Due to air flight limitations, this year they could not travel to Caribbean destinations, Thailand, Cyprus, Malta, and Canary Islands. They realized that could go to the sea mainly by car.
Italy and Spain were heavily blacklisted due to high COVID-19 figures, and France could not demonstrate a 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 vacations with a low concentration of people, as there are no large cities in Croatia at the seaside. For example, Split, the largest city on the coast, has a population of 178,000 people. For comparison, in Nice (France) there are well over 500,000 permanent inhabitants. Most Croatian towns are smaller places with no more than 10,000 people living there in private houses. 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 an ecological and COVID-free paradise.
The new tendency of 2020 is that self-standing villas and houses become more popular both for renting and buying than apartments. People wanted to stay isolated, with no people around, to cook at their kitchens, to swim in their 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 euros” and “seafront villa in Dalmatia up to 1,5-2 mln euros”. People who used to travel on their 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, and Mljet islands were even more popular than luxury villas on the mainland. This was quite new and unexpected. The vicinity of infrastructure and airports 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 in 14-day 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 the first 9 months of 2020 compared with 2019. Prices will continue to fall as tourist season in Croatia this summer was far from being very successful. Real estate specialists give the prognoses of the lowest property prices in January-February 2021.
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