Generation Rent: Why young people are staying in rental accommodation longer and longer

For earlier generations in Croatia, owning a home was almost the norm — but this high rate of ownership was largely shaped by historical circumstances, primarily the privatization of apartments during the transition and the inheritance of properties within families, and not just the "save and buy" pattern. Ownership was both a financial goal and a deeply rooted cultural value. For an increasing number of today's young people, the path to owning property looks different: buying is postponed to later years, and the period of living in rented accommodation or with parents is extended in a way that was unusual for earlier generations.

The phenomenon is so pronounced that it has acquired a name worldwide — „Generation Rent", or "generation rent" in our language. It's easy to reduce it to one sentence, "properties are too expensive," but the reality is more complex. It's a combination of economic, social, and personal factors that reinforce each other: from the relationship between prices and wages, through difficulties with deposits, to changes in how young people work, live, and what they consider desirable. In this text, we break down these factors one by one, observe the consequences of the trend, and ask what it means for the future of the market and for young people themselves.

What „Generation Rent" Means and How It Looks in Croatia

The term describes a cohort of young adults who, unlike previous generations at the same age, postpone buying their own property for longer, and increasingly spend the period before purchase in rented accommodation. It's important to immediately place the term in the Croatian context, as it originally comes from countries where renting is widespread. Croatia is the opposite: according to Eurostat, almost 91 percent of the population lives in their own property, and only about 9 percent rent, placing us at the very top of the EU.

Because of this, the delay in entering homeownership in our country has so far manifested less through long-term renting and more through extended stays in the parental home. According to Eurostat, as many as 78 percent of young people aged 18 to 34 live with their parents, and the average age of leaving home is about 31 — the highest in the entire Union. "Generation Rent" in Croatia is therefore an emerging trend, most visible in large cities, where more and more young people are still choosing to rent and live independently.

The phenomenon is not the same for everyone. For some, extended renting is a temporary phase — a conscious postponement of buying until a career is established and capital is saved. For others, it is closer to a more permanent state where buying remains out of reach. This duality — renting by choice versus renting out of necessity — runs through the entire trend and explains why it cannot be reduced to a single explanation.

Professional tip: When considering your own situation, ask yourself whether your rental is a temporary, strategic phase or a forced state — because that answer determines whether you need a plan for buying or a plan for quality long-term renting.

Prices, Wages, and the Deposit Hurdle

At the heart of the trend lies a discrepancy: real estate prices have grown significantly faster than wages in recent years. According to Eurostat's housing price index, prices in Croatia rose by about 130 percent from 2015 to 2025, while the average net wage in the same period, adjusted for inflation, increased by only about 38 percent (CBS data). To illustrate: the amount that could buy an apartment of approximately 115 square meters in 2015 now buys only about fifty. In the third quarter of 2025, prices, according to Eurostat, grew by about 14 percent year-on-year — among the highest rates in the EU.

This gap is particularly pronounced in large cities like Zagreb, Split, and Rijeka, where the concentration of jobs and demand is highest — and these are precisely the places young people move to for work. A paradox arises: young people gravitate towards cities with the most opportunities, which are also the cities where purchasing is least accessible.

Even when young people can afford the monthly loan installment, another, often greater, obstacle arises: initial capital, primarily the deposit. Banks regularly require that the buyer covers a portion of the property's value with their own funds for a housing loan, and buying costs also come with the deposit. For someone just building a career and simultaneously paying rent, saving such an amount is extremely difficult. A vicious circle emerges: high rent makes it difficult to save for a deposit, and without a deposit, there is no purchase to replace that rent. We write more about what a deposit, LTV, and other credit terms are in the guide LTV, DSTI, EKS, and credit terms.

Professional tip: If the deposit is your main obstacle, specifically research whether there are programs or incentives for first-time buyers and models that reduce the required initial capital — because for many, the problem is not repayment, but precisely the entry.

Uncertain Careers and Delayed Life Transitions

The nature of work has changed compared to the generation that bought homes with a single stable, permanent job, often with the same employer for decades. Today's young careers are characterized by more frequent job changes, fixed-term contracts, project-based work, freelance and self-employment, and periods of reskilling. Such a more variable career path poorly aligns with a decades-long commitment like a housing loan. When you're unsure where or for whom you'll be working in a few years, a thirty-year loan seems risky, even if it's mathematically feasible.

In addition, Generation Rent is part of a broader change in the timing of adulthood. Young people today finish schooling later, enter stable employment later, and marry and have children later than previous generations. Since buying a first property was traditionally linked precisely to these transitions — establishing a household, starting a family — their shift to later years automatically shifts the moment of purchase. In Croatia, this period is most often filled not by renting, but by the parental home, which is confirmed by the data that young people leave home the latest in the EU.

Professional tip: Don't tie buying to age or to what peers have already bought, but rather to your own life circumstances and income stability — a long-term loan is best handled with reasonably predictable income, and the "right time" today is much more diverse than before.

Change in Values: Mobility and Relationship to Ownership

In addition to economic reasons, part of the trend rests on a change in values. For many young people, mobility has become an advantage, not a disadvantage. The ability to move relatively easily for a better job, an opportunity in another city or abroad, is something that renting allows and ownership complicates — selling and buying are slow and expensive, while a rental agreement can be terminated relatively easily. The rise of remote work has further reinforced this logic: when work is not tied to one place, housing flexibility becomes a value in itself.

All of this also shapes a more subtle change in the very relationship to ownership. For some of today's young people, the status of ownership has weakened as an absolute priority; some prefer to invest in experiences, education, or a more mobile lifestyle, and view housing as a service they pay for. This change, however, should not be overestimated — especially not in Croatia, where the cultural inclination towards ownership remains strong and deeply rooted in the belief that one's own roof over one's head is the best investment. The shift is real, but moderate: for some young people, ownership is no longer an obvious goal to which everything is subordinated, but one of several options weighed against others.

Professional tip: Re-evaluate whether ownership is your real goal or an inherited expectation — both decisions are legitimate, but a conscious choice leads to better financial planning than buying "because that's what you do."

Consequences for the Rental Market

The trend has clear consequences for the market itself. As more young people stay in rented accommodation for longer, demand grows, especially in large cities and university centers like Zagreb, Split, Rijeka, and Osijek. This creates pressure on rents and changes the nature of the market — renting is becoming less of a short-term, transitional phase and increasingly a long-term way of living for a broader segment of the population.

In coastal cities, an additional, Croatian-specific pressure is at play: short-term tourist rentals. In places like Split, Zadar, Dubrovnik, and Rovinj, a large portion of apartments are aimed at tourists, which reduces the supply of long-term rentals and further drives up rents for the local population. We write about the business and legal aspects of this form of rental in the guide Short-term rental: registration, taxes, and owner's obligations. It is also worth noting that the high national ownership rate conceals real pressures: according to Eurostat, almost a third of citizens live in overcrowded spaces, significantly above the EU average, partly precisely due to multi-generational housing.

For owners and investors, this changes the calculation. Long-term, stable tenants who view the rented space as a home become a valuable segment, and interest is growing in forms of housing adapted to this group, such as rentals for young professionals or students. We write about where and how to invest in rental property in the guide Where to buy for rent.

Professional tip: If you are considering investing in a rental property, bear in mind that the growing "Generation Rent" means stable long-term demand — but also tenants who seek quality and security in long-term housing, not just a low price.

What This Trend Means for Young People

For young people themselves, extended renting carries both risks and opportunities. The risk is that long-term rent payments do not build one's own assets in the way that loan repayment does — money goes towards housing, but not into one's own capital. Additionally, long-term tenants are more exposed to rent changes and less housing security than owners. Therefore, for those who still wish to buy, it is important that extended renting does not become a passive state, but a period in which a path towards buying is consciously built.

On the other hand, renting offers real advantages — flexibility, lower upfront costs, and freedom from long-term commitment — which, in certain life stages, outweigh the benefits of ownership. The housing issue for young people has also become a topic of public policy: the state announces investments of approximately 1.5 billion euros in affordable housing by 2030, along with incentives for local self-governments to accelerate housing construction. The key, however, is that the choice is conscious: to understand where you stand in the trend, plan according to your own goals, and not leave the decision to mere inertia.

Professional tip: If you are in a long-term rental and want to buy, set a concrete savings plan for the deposit and monitor lending conditions — passively waiting for "better times" rarely brings buying closer, while a concrete plan does.

How Your Regent Real Estate Agency Can Help

Whether you are renting by choice or building your path towards your first purchase, Regent helps you navigate the market — from finding quality long-term rentals to advising and preparing for your first property purchase when the time is right. We help you consider your options soberly and in line with your life stage and goals. For a conversation tailored to your situation, contact us.

Frequently Asked Questions (FAQ)

What does the term „Generation Rent" mean?
The term is the Croatian translation of the English phrase „Generation Rent" and denotes a trend in which young adults, unlike previous generations at the same age, postpone buying their first property for longer and live in rented accommodation for extended periods. In Croatia, this trend is just developing, primarily as an extended stay in the parental home and a later purchase rather than long-term renting, as the share of rentals is traditionally small.

Why is it increasingly difficult for young people in Croatia to buy property?
The main reason is the discrepancy between the faster growth of real estate prices and the slower real growth of wages, especially in large cities. According to Eurostat, prices rose by about 130 percent from 2015 to 2025, while wages grew significantly less in real terms. Additionally, the obstacle of a deposit and initial capital, more uncertain careers, and delayed life transitions like later family formation stand in the way.

What is the biggest obstacle for young people when buying — the installment or the deposit?
For many, it is precisely the deposit and initial capital, not the monthly installment itself. Monthly rent is often comparable to a potential loan installment, but the problem is saving the initial amount and covering buying costs while simultaneously paying rent.

How does the „Generation Rent" trend affect the real estate market?
It increases and prolongs the demand for rentals, especially in large cities and university centers, thereby increasing pressure on rents. In coastal cities, additional pressure is created by short-term tourist rentals, which reduce the supply of long-term rentals. Renting thus becomes a more long-term way of living, and not just a transitional phase.

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• First Property: Rent or Buy
• Renting an Apartment in Croatia: What You Need to Know Before Signing a Contract
• Housing Loans: Types, Conditions, Banks
• Guide to Long-Term Renting