Croatian Realty Market Review 2019
Following the report of Croanweek of January 13th Croatian real estate market demonstrated 10% increase in 2019 and occupied the 3d place in Europe after Luxembourg and Hungary. Major engines of this statistics are prices rise in Dubrovnik, Split and Zagreb. While Zagreb just follows residential construction boom, Dubrovnik and Split suffer from lack of new construction. Burza Nekretnina statistics shows stable rise in prices for Croatian real estate since early 2018. Despite difficulties in purchasing procedure which is still present for many non-EU countries, every fifth property in Croatia is sold to a foreigner. Among the most frequent requests for the real estate at Croatian coast are waterfront villas or apartments. Most of buyers from Austria and Germany continue to be focused on Istria with tragic absence of new beachfront villas under 2-2,5 mln euro. Istria still offers less than 4-5 proper villas of this kind. Practically the same is situation over Kvarner which continues to be overpriced.
New modern villas of first line position is a great rarity in Dubrovnik area as well with prices reaching 4-5 mln. euro for a proper modern villa with private beach. Most popular request is a first line new modern villa in Rovinj, simply because there are no such villas at the market at all. As far as apartments market is concerned, the largest growth is being demonstrated by Split area where flats in some new completex are sold out one yeear before actual completion of construction. The closer to Split center the apartments are, the higher demand is, especially when the building is located by the sea. The specialists also state the shortage of urbanized seafront land plots suitable for villas and hotels construction. Urbanized areas are rather limited, building parameters are strictly regulated, this is the reason why even ruins of seafront location are in high demand now, especially in Istria.
Why the prices in Croatia are rising?
Property market is following development of tourism. Following Evisitor automatic system of visits registration in Croatia, Croatian tourism showed +5% growth in 2019 in terms of arrivals (20,7 mln in total) and +2% growth in overnight stays (108,6 mln). 2019 was another recod year for Croatian tourism following incredible succes in 2018, 2017 and 2016. It is 5th year in a row with rising tourism results. No climate fluctiations, no political exposures effect this tendency of growing interest towards Croatia. Tourists who come to Croatia spend more and more. Their daily spendings rose 20% vs those in 2017 and amount to 97 euro per day. It means Croatia is now offering quality tourism and quality accomodation. Overall tourism revenues rose more than 9% in 2020. If we look at the portrait of visitors we will see that Croatia is most popular with the Germans (no 1 with 21,2 mln of stays), followed by Slovenians (10,9 mln of stays), Austrians (7,8 mln of stays) and Italians (5,5 mln of stays). This statistics can be applied to real estate demand in same proportion. If we look at overnights geographical distribution, TOP-5 destinations in 2019 were Dubrovnik, Rovinj, Porec, Split and Medulin.
Among the best hotel openings of 2019 were Grand Park Hotel in Rovinj which was included in The Leading Hotels of the World organization. In 2020 hotels "Ambassador" and "Amphora" in Split are expected as most noticeable new openings. "Condé Nast Traveler" maganize named Croatian island of Hvar as island No 1 in Europe due to it's natural beauty, vibrant atmosphere, cultural background. In 2020 Croatia takes over EU Presidency and it will rise popularity of Croatia as well and shift emphasis towards it somehow. Croatia is becoming more and more financially attractive and is expecting investors to look attentively at it's investment potential in hotel tourism, luxury villas tourism and residential construction. We are sure there are many other spheres where investment can bring booming results.