Croatia

Croatia is experiencing a significant housing crisis marked by rapid price growth and limited affordability, especially for young people. Residential property prices have been rising steadily, with a 10.1% increase in late 2024 compared to the previous year. The long-term trend since 2017 has seen annual increases of 8–12%, driven by strong demand, limited new construction, and interest from foreign investors. As a result, homeownership for new buyers—particularly young adults—has become increasingly unattainable. Approximately 70% of people under 31 do not have sufficient income to rent or buy property. Many young adults live with their parents well into their thirties, with Croatia having one of Europe's highest rates of adults living at home. Limited employment opportunities, high living costs, and complex administrative barriers further push young people either to rent in costly, insecure environments or to emigrate in search of better prospects. This trend is particularly pronounced in regions such as Istria, which faces both a declining population and high youth emigration. The crisis also affects low-income families, the elderly with inadequate pensions, and the growing homeless population. More than 2,000 people are officially homeless, and over 10,000 live in unsafe housing, while shelter capacity is severely lacking. Vulnerable groups often have very limited access to affordable rental or social housing due to a severe shortage of state-subsidized or municipal apartments.

Croatia’s national government is addressing affordable and sustainable housing through a new National Housing Policy Plan until 2030, with an operational Action Plan covering 2025–2027 and a €683 million budget. The main targets are to increase affordable housing supply, improve sustainability, and ensure efficient land use. Key goals focus on helping young families and retaining skilled workers in Croatia, as well as revitalizing areas with labor shortages. Recent reforms include amendments to the Affordable Housing Act (POS), notably raising the maximum state-subsidized sales price to €1,912 per sqm due to rising construction costs. A major new measure is a 50% VAT refund for first-time homebuyers under age 45, alongside refunds for real estate transfer taxes, to directly ease purchase costs for younger citizens. Flats purchased through these supports come with restrictions on sale, rental, or non-occupancy for five years. Other initiatives introduce affordable state-owned rentals and a program where private owners can rent vacant homes through the national real estate agency, with the state acting as intermediary. There is a push to activate Croatia’s large stock of empty homes for residential use and reduce the share used for tourism rentals by restricting short-term lets, aiming to bring more long-term rental units to market. Overall, the government’s strategy combines financial incentives, legal reforms, and efforts to shift vacant or tourism-focused housing into affordable, sustainable homes for Croatian residents.

The cooperative housing sector in Croatia is in its early stages, with a negligible share of the national housing stock. Cooperative housing projects remain rare and generally exist as pilot initiatives, such as the one in Križevci, which involves converting a former military facility into cooperative homes. This project is supported by local government and organizations and exemplifies the sector’s focus on young people, first-time buyers, and the elderly. Cooperative housing in Croatia aims to provide affordable, sustainable, and community-oriented alternatives to traditional homeownership and renting. Financing for such projects is often secured through crowdfunding and alternative sources rather than conventional bank loans. There is no official national statistic on the share of cooperative housing in Croatia’s housing stock, but available evidence indicates it remains extremely low. The current housing policy framework prioritizes increasing affordable housing supply, particularly for younger and vulnerable groups, but cooperative housing is not cited as a major policy pillar or widespread solution. The Croatian government’s National Housing Policy Plan until 2030 focuses mainly on financial incentives, regulatory reforms, and activation of vacant dwellings with limited direct reference to supporting the cooperative housing model. Local-level interest and pilot projects indicate some momentum, but the sector has yet to mature, and there are no large-scale government schemes to promote cooperative housing specifically.

Croatia’s housing market continues to see strong price growth, with the national average price for new builds reaching approximately €2,377 per sqm in mid-2024 and asking prices for flats averaging €3,543 per sqm. Zagreb and coastal areas are the most expensive, with Zagreb averaging €2,830–3,750 per sqm, while some inland counties remain below €1,300 per sqm. Rents have also climbed, but precise current nationwide median figures for rent per sqm are less available. Homeownership is extremely high: about 91% of Croatians live in property they own, making Croatia one of the top countries in Europe for homeownership. Only roughly 9% of people rent, with the rental market largely unregulated and unaffordable for many, especially young people and low-income families. Publicly owned housing, through programs like POS (state-subsidized construction and sales), represents a very small share of the market—since 2003, around 9,000 apartments have been sold or rented under favorable terms, out of a total housing stock exceeding two million. Public housing in Croatia is generally synonymous with social housing in cities, both targeting affordability for those unable to access market-rate homes. However, the absolute share of these units is minimal in comparison to overall demand and the number of vacant dwellings, which accounts for about 30% of homes registered as permanent residences.