Government does not expect increase in foreign interest in Croatian real estate

Minister of Justice, Administration and Digital Transformation Damir Habijan assured opposition MPs on Thursday that equalizing the rights of real estate buyers from Croatia and OECD countries will not significantly affect the real estate market in Croatia.

The equalization of the rights of real estate buyers from Croatia and OECD countries is brought about by amendments to the Law on Ownership and Other Real Rights, for which the opposition expressed its fear that the problem of affordable housing, which is already large, will further increase.

“For 36 of the 38 OECD member states, there is already a possibility of acquiring real estate ownership rights in Croatia, according to the principle of reciprocity. Reciprocity has only not been established for two member states,” namely Mexico and Costa Rica, Damir Habijan said.

“Data on 10,320 requests for the acquisition of real estate by foreigners in Croatia from 2013 to 2024 speaks volumes that we should not expect a major increase in interest in real estate by foreign citizens,” the minister pointed out, adding that there is also the possibility of imposing certain restrictions for a specific country or all OECD members for a certain period.

Land registers: 4 percent of owners have Personal Identification Numbers of foreign citizens

“Of the total number of properties registered in the land registers, 4 percent have Personal Identification Numbers of foreign citizens (around 321 thousand), and 0.5 percent refer to citizens of OECD members,” he stated.

A larger number of buyers will certainly worsen the already bad situation on the real estate market, believes Marin Živković (Možemo party). “Real estate prices are already growing unstoppably, people cannot afford an apartment in Croatia and the situation is catastrophic, and with a larger number of buyers, the already bad situation will certainly worsen,” he said.

Anka Mrak Taritaš (GLAS party) also points to the problem of affordable housing in Croatia and skyrocketing prices.

Foreigners interested in real estate by the sea

“Foreigners are mainly interested in real estate by the sea, and some Mediterranean countries have decided to solve this with taxes,” she said.

Peđa Grbin (SDP) also warned about the housing crisis in Croatia. “Instead of taking any concrete action on this issue, we are going with this proposal that will not help anything, but will only worsen the situation,” he said, noting that the average price of a square meter of an apartment in the Istrian region is 3,800 euros.

Miro Bulj (Most party) is concerned about the possibility of foreign citizens buying real estate in protected natural areas. “This is a disaster, we are allowing the richest to buy our natural resources and the most protected areas,” he said.

“This law does not regulate this issue at all, but the law on nature protection,” Minister Habijan replied.

“We are talking about the sale of Croatian land, about the owner of my father's house in Kastav becoming a Japanese or an Australian,” Marin Miletić (Most party) claimed.

Will real estate prices increase?

Danijela Blažanović (HDZ) particularly emphasized the possibility of introducing restrictive measures, measures that were not previously in the law.

She also pointed out that real estate experts say that the economic situation in the countries from which foreign buyers come is a more important factor than administrative changes, deeming the opposition's claims that real estate prices will increase incorrect.

Source: HRT