Government proposes €2bn plan to boost affordable housing

The high cost of buying or renting a home has become one of the biggest challenges facing Croatians in recent years. 

The country has more than half a million empty apartments, nearly another million properties not used for housing, and over 350,000 units dedicated to short-term tourist rentals. At the same time, Croatia is estimated to lack more than 200,000 housing units. Many Croatians also continue to live with their parents until the age of 33, well above the EU average of 26.

In response, the government on Thursday presented a proposed Affordable Housing Act aimed at facilitating the construction and renovation of more than 20,000 apartments by 2030, with investments totaling €2 billion.

“The law will specifically encourage the construction of family homes,” said Deputy Prime Minister and Construction Minister Branko Bačić. “Subsidies will be higher and loans more favorable, with lower interest rates financed from the state budget, enabling families to build new homes and renovate existing ones.”

Croatian MEP Nikolina Brnjac said the housing shortage has wider implications.

“The housing crisis is not only a social issue but also a demographic one,” she said. “A report predicts that by 2040 there will be an annual shortage of two million working-age people. That shows how important affordable housing is. The European Commission has made it a strategic priority.”

The apartments would be reserved for first-time buyers who meet income thresholds, with priority given to people under 45, families with children, and vulnerable groups. The draft legislation is expected to be sent to parliament next week.