Croatia Home Prices Rise as Sales Collapse

Croatia's housing market entered 2026 with a sharp divergence between prices and transactions. Residential property prices rose 14.3% year on year in the first quarter, while the number of purchases by households fell 42.2%. New-home transactions dropped 50.9% and existing-home sales declined 37.4%. More recent data on newly sold dwellings show that prices remained elevated in the first half of the year, averaging €3,012 per square metre for commercial sales excluding the POS programme nationwide and €3,554 in Zagreb.

Housing transactions fall 42.2%

Croatian residential property prices rose 3.3% from the previous quarter and 14.3% from a year earlier in the first quarter of 2026.

Transactions in which households purchased residential property moved sharply in the opposite direction. Their number fell 42.2% from the first quarter of 2025 and 27.5% from the final quarter of last year.

New-home prices increased 9.7% year on year even as the number of purchases fell 50.9%. Existing-home prices rose 16.1%, while transactions declined 37.4%.

The total value of housing transactions dropped 35.4% year on year. The value of new-home purchases was down 43.5%, while existing-home transactions fell 29.3%. Croatia's statistical office, DZS, began publishing quarterly changes in the number and value of housing sales alongside its price index in 2026.

The distinction is important. A price index reflects properties that actually change hands. Homes whose owners reject lower offers and fail to find buyers do not become transactions. A market can therefore lose liquidity before recorded sale prices begin to fall.

Price growth extends beyond Zagreb and the coast

All three regions used by DZS in its housing index recorded strong annual growth.

Prices increased 14.7% in Zagreb and 12.6% along the Adriatic coast. The strongest increase, 18.1%, was recorded in the rest of Croatia.

Compared with the fourth quarter of 2025, values rose 4.8% in Zagreb, 2.3% on the Adriatic and 2.2% elsewhere.

CIJ.World highlighted the same divergence, noting that strong price increases have spread beyond Croatia's best-known housing markets even as far fewer households complete purchases. The available national statistics do not establish which groups of buyers are supporting the current level of prices.

Zagreb new homes sell above €3,500 per square metre

Data published on Sept. 7 show that prices of newly sold dwellings remained high during the first half of the year.

The average price of all new dwellings covered by the DZS survey was €2,994 per square metre. Homes sold by companies and other legal entities, excluding the state-subsidised POS programme, averaged €3,012, up 8.9% from the first half of 2025.

In Zagreb, all newly sold dwellings averaged €3,518 per square metre. Commercial sales excluding POS reached €3,554, an increase of 19.9% year on year. Outside Zagreb, the corresponding commercial average was €2,766.

These figures should not be treated as a direct continuation of the nationwide house-price index. The separate new-dwelling survey covered 1,618 sales totalling 107,541 square metres and a limited group of reporting companies. DZS explicitly notes that the reported number of dwellings does not represent the full volume of all new-home sales in Croatia.

The data therefore confirm the high prices achieved in monitored new-home transactions during the first half, but do not by themselves show that overall sales volumes recovered after the first-quarter slump.

The decline in sales predates 2026

Housing-market activity had already been weakening before this year's first-quarter plunge.

The number of residential transactions in Croatia fell 4.1% in 2025. Among the 18 EU countries with comparable annual data, only Croatia, Bulgaria and Poland recorded declines.

Transactions had already fallen 13.9% in 2024, the second-largest decline among the countries covered after Slovenia.

The 42.2% fall in the first quarter of 2026 therefore represents a sharp acceleration of an existing trend. If similar weakness persists in subsequent quarters, seasonal factors alone will become increasingly difficult to use as an explanation.

Housing remains expensive relative to fundamentals

Affordability is becoming a larger issue as prices continue to rise.

The European Commission estimated that Croatian housing was overvalued by around 17% in 2025 under its standard methodology.

Croatia also has an unusual supply problem. The Commission estimates a housing shortfall of about 230,000 homes, while nearly 30% of existing dwellings intended for permanent residence remain unoccupied. Home ownership is around 91%, and the long-term rental market remains small.

The country therefore has both a shortage of housing available where people need it and a large stock of property that is not being used for permanent residence.

Foreign buyers have supported demand

Croatian housing demand has not been driven solely by domestic households.

The OECD links the past decade of strong price growth to higher incomes, lower unemployment, banking liquidity, tourism and foreign demand. Foreign buyers accounted for more than a quarter of the total value of housing purchases in 2022.

Croatia's adoption of the euro subsequently made transactions easier for many EU buyers, while tourism continued to support demand for second homes and investment properties along the Adriatic coast.

First-quarter statistics do not identify which groups are supporting prices in 2026. As total transactions shrink, however, the financial profile of the remaining buyers becomes increasingly important.

Buyers are retreating faster than sellers

Weak demand does not force every homeowner to lower an asking price immediately.

Owners who do not need to sell quickly can wait, while potential buyers can simply walk away. The result is fewer transactions before there is necessarily a broad fall in completed sale prices.

Dubravko Ranilovic, head of the Real Estate Business Association at the Croatian Chamber of Economy, has linked the slowdown to high prices, limited available supply and the large stock of vacant homes. He has also noted that transaction activity has been declining for several years.

That helps explain how a market can continue recording higher prices while losing a large share of its turnover.

Government measures are targeting unused housing

Croatia introduced a real-estate tax from Jan. 1, 2025, replacing the previous holiday-home tax. The government has used the measure as part of a broader attempt to bring vacant and short-term rental properties back into permanent residential use. The Construction Ministry has explicitly linked the tax and restrictions on short-term rentals to the effort to increase long-term housing supply.

At the same time, Croatia subsidises first-home purchases for eligible citizens under 45. Buyers of existing homes can receive a full refund of property transfer tax, while qualifying purchases or construction of new homes can receive a refund of up to 50% of VAT paid.

The policies work on different sides of the market. Measures targeting vacant housing are intended to increase effective supply, while first-home support strengthens the purchasing position of eligible households. Where supply remains tight, buyer subsidies can also help sustain price pressure.

New homes are becoming the key test for developers

The 50.9% decline in new-home purchases is the most sensitive first-quarter figure for developers.

Recorded prices have remained high, but maintaining them becomes harder if homes take longer to sell. Unsold units tie up capital and can eventually influence the timing of future phases and financing decisions.

The available statistics do not show that developers have already accumulated a large inventory of unsold housing. They show a sharp decline in completed household purchases, not a comprehensive measure of current listings or developer stock.

DZS is scheduled to publish second-quarter house-price and sales indicators on Oct. 1, 2026.

Transaction volumes will be the more important figure to watch. A strong rebound would suggest that the first quarter was unusually weak. Another large decline would indicate that the gap between prices and market liquidity is becoming more persistent.

As experts at International Investment report, liquidity is now the central risk in Croatia's housing market. A 14.3% increase in prices alongside a 42.2% fall in transactions shows that expensive homes are still finding buyers, but there are far fewer of them. Prices can remain elevated while owners are willing to wait. If weak turnover persists for several quarters, pressure is likely to emerge first through longer selling periods, discounts and development decisions. New housing is particularly exposed after household purchases fell by roughly half in the first quarter.