Investing in real estate abroad has been very popular for years. Croatia, with its picturesque coastline, rich history and relatively favorable real estate prices, has long attracted the attention of investors from Poland and other countries. However, like any market, the real estate market in Croatia has its advantages and challenges. Therefore, today we will answer the question: Is it worth investing in real estate in Croatia?
Stability and economic development of Croatia
Croatia, a member of the European Union since 2013 and the Schengen Area since 2023, is an economically stable country with a favorable geographical location and constantly developing infrastructure. Economic stability and the availability of bank loans facilitate the investment process. Croatia is a popular tourist destination, which attracts investors interested in buying real estate for short-term or long-term rental.
Why is Croatia attractive to investors?
High tourist demand
Croatia is one of the most popular destinations in Europe, attracting millions of tourists every year, which ensures high demand for seasonal rentals. In the summer season, especially on the Adriatic coast and in cities such as Split, Dubrovnik and Zadar, the occupancy rate of rental properties reaches almost 100%.
Low level of property taxes
Croatia has introduced one of the lowest tax rates in the region, which is an additional incentive for investors. In the case of short- and long-term rentals, only small administrative fees apply.
Favorable shopping conditions for EU citizens
Foreigners from European Union countries can buy real estate in Croatia almost on equal terms with Croatian citizens. This facilitates the purchase and procedures related to the registration of real estate.
The situation on the real estate market in Croatia
Croatia is divided into several regions, the most popular for investors being Dalmatia (coastal region). However, it is worth noting the differences in prices depending on the location.
Dubrovnik
It is the most expensive city in Croatia, and prices per square meter can reach up to 5,000 euros and more. The city mainly attracts investors who have larger budgets and are interested in luxury apartments and houses by the beach.
Split and Zadar
Real estate prices are slightly lower than in Dubrovnik, but they are still an attractive investment opportunity. Split, being the second largest city in Croatia, attracts tourists and students, which provides good prospects for both short-term and long-term rentals.
Mountainous regions and other tourist destinations
Real estate prices in the mountainous regions of Croatia are much lower than on the coast, but the popularity of these areas is constantly growing, which can be an investment opportunity for those on a tight budget.
Is it worth investing in real estate in Croatia?
Investing in real estate in Croatia can be very profitable, especially in the case of tourist rentals. During the summer season (June to September), rental prices are much higher than in the off-season. Investors can count on high rates of return on short-term rentals, especially in coastal locations. In Dubrovnik, for example, renting a luxury apartment with a sea view can bring a profit of up to tens of thousands of euros per year.
Moreover, thanks to its strong tourism industry, Croatia offers an almost constant flow of customers throughout the year. Outside the summer season, tourists are attracted by winter festivals, the Rijeka carnival, as well as cultural and gastronomic tourism. Short-term rentals can therefore be profitable for most of the year.
Selected investment challenges
Despite its numerous advantages, investing in real estate in Croatia also has some risks and challenges:
Seasonality risk
Wysoki popyt na wynajem turystyczny dotyczy głównie okresu letniego, co oznacza, że poza sezonem właściciele nieruchomości mogą mieć trudności z utrzymaniem stałych przychodów. Jest to szczególnie istotne dla inwestorów zależnych od regularnych wpływów.
Legal restrictions
Some areas of Croatia have restrictions on the types of activities that can be conducted in rental properties, so investors should carefully review local rental regulations to avoid legal issues.
Property maintenance costs
Although property taxes are relatively low, maintenance costs can be higher than in Poland, especially for properties in tourist resorts. This includes building maintenance fees, maintenance, and property management services during rental periods. Nestovia, thanks to its many years of experience in the real estate industry in Croatia, invites you to cooperate and familiarize yourself with our services.
Alternatives and investment strategies
While short-term rentals are the most common investment option, there are other strategies that can be beneficial to different types of investors:
Long-term investment with a view to future resale
Croatia continues to develop its infrastructure, which could help to increase property values in the coming years. Investors may therefore consider buying property in less developed areas with the hope of seeing prices rise in the future.
Management by local companies
To minimize the risk of seasonality, many investors decide to work with local property management companies. These companies can help optimize rentals and maintain the property at a high level. We are also a company that offers such services, which is why Nestovia invites you to cooperate and contact us.
Summary
Is it worth investing in real estate in Croatia? For those interested in the tourism market and short-term rentals Investing in real estate in Croatia can be profitable. The country offers political stability, low taxation, and a growing demand for tourist rentals in the most popular locations. Investing in Croatia can bring a solid return, especially in the long term, if you choose the right location and rental strategy.
Like any investment, this one also requires proper analysis and understanding of risks and challenges, such as seasonality of rentals or property maintenance costs. Despite this, for many investors from Poland, Croatia is becoming an increasingly attractive real estate market.