Media have recently been reporting on significant property price increase in the city of Zagreb. Even the side look to Croatian property portals reveals higher asking prices compared to the same period of last year. So what does the actual statistics say?
At first it appears that the real estate market in Zagreb has strongly recovered. According to Croatian bureau of statistics, the average price of the newly built apartments in the second half of 2017 was 1.654 euro per square meter, representing an increase of 24,8 per cent on year-to-year basis. At the end of March 2018, the average asking price of the new construction seems to be around 1.800 euro per square meter.
While this may create an impression that the property market in Croatian capital is booming, it is important to mention the reasons behind, as we do not believe that this growth is sustainable on a long run.
Much like in the rest of the country, Zagreb has not had any new residential developments for nearly 5 years. This caused accumulated demand, released as soon as the new dwellings came out on the market. Let's not forget – it is a city with a population of 1 million where many buildings are not in a good condition, causing people to move into the newer properties. Beside, as the tourism in Zagreb exploded in the past 2 years, many investors from other parts of the country want to purchase a property in Zagreb as they can earn much more from short term letting than on interest rates.
Recently built, but unattractive and poor quality projects have fallen in price, meaning that the buyers have profiled worthy prospects and not all apartments are set to sell. As a conclusion, we may suggest that apartment prices in Zagreb will continue to rise for a very short time and remain steady afterwards, as soon as accumulated demand falls down.
The most expensive districts reported are Tuskanac, Pantovcak, Centar and Vrbani, all being above 2.000 euro per sq.m on average.
If you need to rent an apartment in Zagreb on a long-term basis, do not hesitate to contact Right Property Croatia. Even though we do not operate in the capital, we can refer you a quality rental agent in Zagreb.