Presentation of the publication “2019 Overview of the Real Estate Market of the Republic of Croatia”

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State Secretary at the Ministry of Construction and Physical Planning Željko Uhlir, M.Sc., and Director of the Institute of Economics in Zagreb, Maruška Vizek, D.Sc., presented, at the Novinarski dom in Zagreb, the publication “2019 Overview of the Real Estate Market of the Republic of Croatia”

“2019 Overview of the Real Estate Market of the Republic of Croatia” is the third edition of the publication that is published by the Ministry of Construction and Physical Planning of the Republic of Croatia in cooperation with the Institute of Economics. The first edition of the publication was published in September 2018 and referred to the period 2012-2017, whereas the second edition referred to 2018 and was published in January 2020.

The main aim of the publication is to inform the public about basic information and trends in the real estate market, which represents a significant contribution not only to a higher quality of assessments, but also to market transparency.

Data shown in the publication

The publication presents data on the state of the real estate market in 2019, as well as the annual change of selected indicators compared to 2018, at the level of the entire country, counties, individual local self-government units (LSU), and for the City of Zagreb also at the level of the cadastral municipality. The survey differentiates between the following types of real estate: apartments (including rental apartments), family houses, business properties (business premises and commercial buildings), building land, agricultural land and forest land. Basic indicators presented for each type of property are the average (median) sale price and average (median) property size. The average (median) age of the property is shown for apartments/rental apartments, family houses and business properties. In the last chapter also the values of the property affordability index per local self-government unit for 2018 are presented and the relations between property prices and demographic indicators, as well as between property prices and tourism activities.

10 percent of GDP in 2019

111,673 transactions were executed in the real estate market in 2019, which represents a 6.5 percent growth compared to 2018. The highest number of transactions relates to transactions of agricultural land, i.e. 38,315 transactions, which accounts for 34.3 percent of the total number of transactions. This is followed by transactions of apartments and rental apartments, which accounted for 26,480, or 23.7 percent of the total number, and by building land transactions amounting to 17.100 (15.3 percent of total transactions). Sale transactions of family houses amounted to 14,006, which accounted for 12.5 percent of total real estate transactions in 2019. The total value of property sold in 2019 amounted to HRK 39.8 billion, which represents 10 percent of GDP in that year.
According to the number of sale transactions, the City of Zagreb is outstanding, followed by urban centres in the coastal area of Split, Zadar and Rijeka, and Osijek in the continental part of the country. In these cities, transactions of apartments/rental apartments are more frequent, whereas the sale of building land is more frequent in the coastal zone outside larger settlements and the hinterland, with transactions of agricultural land prevailing in the rest of Croatia.

Figure 1: Number of sale transactions and value of sold real estate in HRK million in 2018 and 2019

Sources: Zagreb Institute of Economics and MCPP

Most expensive apartments in Dubrovnik

A median price of apartments/rental apartments in 2019 exceeding HRK 15,000 per m2 was recorded only in Dubrovnik. A median price ranging from HRK 10,001 to 15,000 was recorded in 38 local self-government units and, except for the City of Zagreb (HRK 9,641 per m2), these are exclusively coastal and island local self-government units (Figure 2). Out of 95 local self-government units that achieved median prices of apartments between HRK 5,001 and 10,000 per m2, 66 are located in the coastal area and on the islands, while the remaining 29 are mostly larger cities in the continental part of the country. Median prices of apartments/rental apartments up to HRK 5,000 per m2 are characteristic of rural areas and most local self-government units located in the central and eastern part of Croatia, in total 45 of them.

Family houses in Adriatic local self-government units are several times more expensive than houses in the continental part of the country

When it comes to family houses, considerably higher sale prices are achieved in towns and municipalities in the territory of the Adriatic Croatia. With the highest median prices, above HRK 10,000 per m2, Ston (HRK 15,475), Seget (HRK 12,090) and Primošten (HRK 10,915) stand out. A median price of houses ranging from HRK 5,000 to 10,000 per m2 was recorded in 15 towns and 12 municipalities in coastal and island local self-government units. Furthermore, out of 85 cities and municipalities that fall into the category of house prices ranging from HRK 1,001 to 5,000 per m2, only seven are located in continental Croatia, while 78 are located in the territory of Adriatic Croatia. Median prices of family houses of HRK 1,000 per m2 and less were recorded in the largest number of local self-government units (225), most of which are located in rural areas of the continental part of the country. For the price of 1 m2 in Split-Dalmatia County as many as 14 m2 of a house in Vukovar-Srijem County could be bought.

Figure 2: Median price of sold apartments/rental apartments per m2 in HRK by LSGU in 2019

Sources: Zagreb Institute of Economics and MCPP

Agricultural land is the most expensive in the Adriatic, the cheapest in Slavonia

In 11 local self-government units the median price of agricultural land was over HRK 100 per m2, namely in Dugi Rat, Okrug, Trogir, Cres, Župa Dubrovačka, Solin, Baška Voda, Podstrana, Dubrovnik, Makarska and Split. In 21 Adriatic local self-government units, median prices of sold agricultural land ranged between HRK 51 and 100 per m2. In 443 local self-government units median prices of sold agricultural land per m2 amounted to HRK 50 and less. Among counties of continental Croatia, the highest median price of agricultural land was recorded in Vukovar-Srijem County, in the amount of HRK 4.2 per m2. In other continental counties, the median price of 1 m2 of agricultural land ranged from HRK 1 in Sisak-Moslavina County to HRK 3.3 in Krapina-Zagorje County. An exception is the City of Zagreb with the achieved median price of agricultural land amounting to HRK 21.7 per m2.

Most expensive building land in the central and southern Adriatic

The median price of building plots above 500 kuna per m2 was recorded by 61 local self-government units. These are cities and municipalities located in the Dubrovnik-Neretva County, Istria, Primorje-Gorski Kotar County, Split-Dalmatia County, Šibenik-Knin County and Zadar County. In only 11 local self-government units, the median price of building land was above HRK 1,000 per m2 in Biograd na Moru (HRK 1,506), Vis (HRK 1,481), Split (HRK 1,479), Gradac (HRK 1,310), Makarska (HRK 1,220), Fažana (HRK 1,127), Sutivan (HRK 1,122), Kali (HRK 1,113), Podstrana (HRK 1,060), Brela (HRK 1,038), In 104 local self-government units, most of which, 81, are located in Adriatic Croatia, the median price of building land ranged from HRK 101 to 500 per m2. Prices per m2 of HRK 100 and less are mostly achieved in rural areas and in central, northwestern and eastern Croatia. Median prices of building land of less than HRK 10 per m2 were recorded in 13 local self-government units, namely in Slatina, Donja Motičina, Orahovica, Mače, Lepoglava, Lekenik, Lobor, Velika, Popovača, Klenovnik, Pakrac, Novska and Lipik.

Most expensive business premises in Dubrovnik, Makarska and Novigrad

The highest median prices of sold business premises/commercial buildings per m2 were recorded in Novigrad (HRK 12,678) and Dubrovnik (HRK 12,599), followed by Split with HRK 9,271, Rovinj with HRK 8,877, Makarska with HRK 8,347 and Šibenik with HRK 8,073 per m2. A median price of HRK 4,000 to 8,000 per m2 was recorded in 15 towns, including the City of Zagreb (HRK 7,313 per m2), Pula (HRK 7,290 per m2), Solin (HRK 7,305 per m2), Zadar (HRK 7,528 per m2) and Rijeka (HRK 7,759 per m2). In this price class there are also cities bordering Zagreb such as Dugo Selo, Velika Gorica and Zaprešić. Most towns and municipalities in Slavonian counties are in the category of HRK 4,000 per m2 and less.

Apartments/rental apartments least affordable in the coastal area

The 2018 affordability index per local self-government unit was obtained by putting into ratio the median price of the apartment/rental apartment per m2 in the LSGU in 2018 and the average annual reported realised net income per employee and by multiplying it by 100. The highest values of the affordability index, which at the same time reflect the smallest affordability of the apartment or rental apartment, were recorded in the coastal part of the country. For example, values of the affordability index of 36 percent and more, which indicate that for one m2 of apartment/rental apartment more than 36 percent of annual income is needed, were observed in three local self-government units, Hvar, Dubrovnik and Slivno. The category in which for one m2 of apartment/rental apartment an average of 28 to 36 percent of the achieved annual net income was required comprises 17 cities and municipalities. These are Sukošan, Krk, Korčula, Split, Funtana, Sutivan, Omiš, Murter, Bol, Novalja, Makarska, Primošten, Baška, Rogoznica, Vrsar, Baška Voda and Okrug. In 20 local self-government units with the lowest affordability, for the average annual income citizens could buy between 2.7 and 3.5 m2 of housing space. Among the first 72least affordable local units (out of 163 local self-government units for which the value of the affordability index is available), there are no settlements that are not littoral or that are not located in a littoral county. Only at place 73 Vrbovec is ranked with an index value of 19. The City of Zagreb is ranked only on place 92 with an index value of 16.3. The most affordable apartments/rental apartments are in Plitvice Lakes, where the affordability index is 3.6, followed by Strahoninec, Đurđenovac, Vrbovsko, Novi Marof, Vukovar, Petrinja and Beli Manastir.
Figure 3: Affordability of apartments/rental apartments by local self-government units in 2018

Sources: Croatian Bureau of Statistics, Zagreb Institute of Economics and MCPP
Here it should be also mentioned that the data presented in the publication is an extract from the eNekretnine information system of the real estate market, which has been operational since late 2015. The system has been continuously upgraded and its further development is co-financed by the European Regional Development Fund under the Operational Programme Competitiveness and Cohesion.
Photo: HINA

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