Germans no longer top property buyers on Croatian coast

Croatia

The number of residential properties sold in Croatia continues to decline and could fall below 28,000 this year, following a drop of about 2,000 sales last year.

According to estimates from those working in real estate sales, next year is expected to see stagnant prices for houses and flats, a view held by 58% of agents.

Nearly 30% believe prices will continue to rise, while one in ten is pessimistic, anticipating a drop in prices.

Among the latter is Dubravko Ranilović, President of the Real Estate Business Association at the Croatian Chamber of Economy (HGK), who recently hosted the annual real estate conference in Zagreb, attended by approximately 600 agents, daily Večernji list reported.

Ranilović argues that the prices of resale properties have reached levels that are unrealistic and unsustainable. He attributes the inflated prices and high seller expectations partly to the real estate industry itself, citing agents who undercut each other, advertise properties without owners’ consent, operate unofficially, and disregard regulations.

“Relationships among colleagues have never been worse. Up to 20 agents can compete for the same location, stealing each other’s clients, pushing boundaries, and manipulating property owners. I would say professionalism in the sector is at a low level, and many are sawing off the branch they’re sitting on,” Ranilović stated critically during his speech in the packed crystal ballroom of the Westin Hotel.

He supported his claims with data showing that asking prices for properties rose by about 10% this year to over €3,240 per square metre, while actual sale prices averaged €1,000 less, at €2,280.

“Agents inflate prices, telling sellers their properties are worth more than they actually are, knowingly misleading them. Buyers today have easier access to information, including databases of property prices. If this continues, there will be no work for you tomorrow or the day after,” he warned his colleagues.

There are currently 1,174 domestic and 46 foreign real estate agencies operating in Croatia, with 4,433 agents certified by the HGK.

However, Ranilović noted that many operate in a legal grey area, falsely claiming to be licensed agents—a designation that does not actually exist under Croatian law.

Licenses are issued to agencies, which then employ agents. Additionally, “sales associates” have begun appearing in the market, a role that is not formally recognised by regulations, further blurring the lines. Ranilović criticised those who claim to work for up to 20 different agencies simultaneously.

Maja Bogovorić, Director of the HGK Trade Sector, revealed that a new law aimed at introducing order to the market is being prepared, with the Chamber planning to submit a proposal to the relevant ministry by the end of the year.

The decline in property sales reflects a broader trend. Annual property transactions in Croatia have fluctuated over the past 15 years, from a peak of 60,000 in 2008 to just 23,000 seven years later.

In the first eight months of this year, foreign buyers purchased around 7,000 properties, mostly in Istria, which accounts for a quarter of all active agencies, and other coastal regions. In Zagreb, foreign buyers acquired just 56 flats.

Notably, Slovenians have now surpassed Germans as the largest group of foreign buyers along the coast.

HGK Chief Economist Goran Šaravanja noted strong domestic demand in the property market. “We are witnessing rising employment, significant wage growth, and, as a result, solid growth in demand for housing loans, which is up by about 9%,” he said.

From a macroeconomic perspective, all conditions for sustained activity in the Croatian real estate market are present, Šaravanja argued, contrasting with the concerns of many agents.

Over the past two years, property prices in Croatia have risen by a quarter, placing it among EU countries with the fastest-growing property prices.

Meanwhile, nations like Spain, Luxembourg, Denmark, the Czech Republic, and Germany have seen declines. Property prices in Italy, for instance, are now lower than they were in 2010.

Lana Mihaljinac Knežević, a member of the HGK Real Estate Business Association Presidency, highlighted a chronic lack of supply as a major issue.

She noted that insufficient construction means newly built properties are unaffordable for most citizens. “The biggest challenge in the Croatian real estate market is the lack of supply—there’s simply too little new construction,” she explained.

Lorena Kogej, a representative from Dogma Real Estate in Istria, predicts 10–15% fewer transactions this year compared to last.

“There’s always something selling, and those who want to work will find opportunities,” she remarked, adding that 70–80% of buyers are returning emigrants. In Istria, prices for new developments range from €3,000–3,500 per square metre to as much as €6,000–7,000. Both flats and villas are being purchased.