Price of arable land in Croatia

Price of arable land in Croatia

The biggest average price of agricultural land in European Union in 2016 was, with no surprise, in Holland – nearly 63.000 EUR per hectare. Meanwhile, in Croatia is was only 2.809 EUR per hectare, which was 22,5 times less than in Holland.

According to Eurostat, European statistics institution, the average price of arable land in 2016 in Holland increased by 1.572 EUR compared to 2015 and by 12.171 EUR compared to 2011.

The data changed when regions were taken into account - the most expensive arable hectare had been found in Liguria region in Italy, priced 108.000 EUR on average.

On the other side of the list, the cheapest agricultural land was in Romania (1.958 EUR on average per hectare in 2016, while the cheapest region was Southwestern Bulgaria (1.165 EUR on average per hectare in 2016).

The difference in average arable land prices between the continental Croatia and coastal part of the country was only 54 EUR per hectare - the continental part of the country being more expensive.

The biggest price increase in the period of 2011-2016 was registered in Czech Republic (where the prices tripled), Lithuania, Latvia, Estonia and Hungary (where the prices doubled).

These stats raise the question – why is arable land in Croatia so cheap compared to other countries in Europe? The explanation comprehends several political and economic issues, resulting with the following answers:

  1. Unsorted land registry, having many title deeds not matching cadastral data, which is essential to anyone looking for non-refundable incentives for agricultuiral production.
  2. Deterioration of industrial activities in the whole country. Many companies with agricultural production are (co)owned by the State, producing losses as they are not market-driven. This reflects on productivity ratio, being very low compared to the same-like land exploited by private companies.
  3. Depopulation of rural areas, as the most fertile northern part of the country is facing huge emigration, leaving agricultural land neglected.

According to Croatian Agricultural Land Act, EU citizens being natural persons may not acquire land out of the building zones until 1 July 2020. This was part of the internal market protection implemented by many other states when joining EU. As the 2020 deadline is getting closer, it is reasonable to expect that interest for the cheap arable land will increase, which may reflect on its price.