Croatians can afford just 1.8 to 3.9 square metres of housing annually

Hina - Housing in Croatia has become largely unaffordable, with citizens able to buy between 1.8 and 3.9 square metres of residential space with their average annual income, a new analysis has shown.

Data presented on Thursday by the Ministry of Physical Planning, Construction and State Assets and the Institute of Economics Zagreb show that despite a continued decline in property transactions, prices remain high, particularly on the Adriatic coast and in Zagreb, driven by global trends, energy costs and construction input prices.

Minister Branko Bačić said the government’s National Housing Policy Plan, backed by a package of eight laws, aims to improve affordability. The main affordable housing law has already been adopted, with legislation on rental housing still to follow.

He said the reforms are expected to stabilise long-term rental prices, alongside measures including a property tax and restrictions on short-term tourist rentals. He noted a 50% increase in long-term rental decisions in 2025 compared with the previous year, but said further steps are needed.

Institute of Economics Director Ivana Rašić said housing is unaffordable in most parts of the country, except in less developed areas with low demand. She said the 87 least affordable municipalities are all on the coast or islands, while Zagreb ranks 88th, where the average resident could afford just over five square metres per year.

State secretary Željko Uhlir warned that construction remains slow, with projects taking three to five years on average, and said building permit issuance fell by around 15% year-on-year in February, signalling weaker future supply.

He said the state must strengthen its policy tools to ensure housing access for those unable to solve their housing needs through the market.

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