The Croatian property market is experiencing a peculiar phenomenon: despite a slowdown in transactions, property prices continue to rise, making older flats less affordable. This is largely due to the high costs associated with renovation, which can account for a significant portion of the total investment. For instance, renovating a 60-square-metre flat can easily cost between €45,000 and €70,000, with more extensive projects costing considerably more. This is a major challenge for buyers, especially those on a tight budget, as it can make the purchase of an older flat as expensive as a new-build home. The situation is particularly acute in Zagreb, where older flats typically sell for between €3,000 and €3,500 per square metre, while prices in Split can exceed €4,000 per square metre in sought-after locations. In Rijeka, prices generally range from €2,500 to €3,000 per square metre, while Osijek remains more affordable, with prices between €1,800 and €2,300 per square metre. According to market estimates and data from Emajstor, basic renovation costs currently range from €400 to €600 per square metre, while comprehensive refurbishments, including new installations and fittings, usually cost between €700 and €1,500 per square metre. This means that the combined cost of purchasing and renovating an older flat can approach the price of a new-build home, making it increasingly difficult for buyers to afford property in Croatia. The rising costs of renovation are a significant factor in this trend, and experts advise buyers to carefully assess a property’s condition before purchase and to set aside at least 15 per cent extra for unexpected works. As labour and material costs continue to rise, renovation has become a key financial factor in determining the overall value and affordability of a property investment. This situation raises a deeper question: how can the Croatian government address the growing affordability challenges in the property market, particularly for older flats, without stifling the market's potential for growth and development?
