After almost a decade of growth, the real estate market in Croatia is entering a period of stabilization. Although the construction sector continues to show strength, with more than 3.5 billion euros worth of work performed in the first half of 2025, the pace is visibly slowing down. The number of new apartments is growing more slowly than before, while prices, although still high, are showing signs of stabilization. Experts point out that 2026 will mark a slowdown in price growth, especially in the used real estate segment.
Fewer Transactions as a Signal of Change
According to available data, the turnover of residential properties in 2025 decreased by about 12%. Fewer sales were recorded in almost all counties, which indicates a gradual saturation of the market.
The decline in demand is particularly pronounced on the coast, where foreign buyers, who in previous years made up to a third of the total transactions, have now become more cautious due to global instability and rising costs.
Although the value of residential building construction in 2025 is still significant, its share in the total construction sector has fallen to only 22%, which confirms that the market is cooling down.
Three Main Reasons for Real Estate Price Growth
In recent years, the growth of real estate prices has been driven by a combination of several factors:
- Limited supply and labor shortage – the lack of qualified construction workers and the outflow of some workers to Western European countries slowed down the pace of construction.
- Low interest rates and investments in safe assets – in a period of financial insecurity, many invested in real estate as a form of capital protection.
- Inflation and rising living costs – buying an apartment has become a way to preserve the value of money in times of inflationary pressures.
However, as we enter 2026, all these factors are slowly losing their strength. Interest rates on savings and loans are rising, investors are becoming more cautious, and construction costs and tax burdens are slowing down the market. See more about the movement of interest rates here.
Real Estate Tax Changes Market Dynamics
The introduction of real estate tax has further affected the market, especially in the investment segment. Residential properties are no longer the first option for quick profit, which has led to less interest in buying apartments and new construction. Many investors are now redirecting capital towards commercial projects or are waiting for more favorable conditions for investment. Due to the new tax rules and a slower pace of sales, the number of empty apartments is increasing, which could be activated through the rental market in 2026. Estimates indicate that there are more than 400,000 unused apartments in Croatia, and about 50,000 in Zagreb alone. Their activation could significantly increase supply and ease the pressure on prices.
Changes in Construction and Supply
The data show that more and more companies are turning to smaller residential projects. Due to limited land and high construction prices, projects with a few apartments are becoming more common than large buildings. In 2025, the construction of buildings with three or more apartments increased by 8.6%, while the construction of buildings with one apartment increased by 5.9%. Despite this, the new construction market is facing a challenge because high prices are no longer available to average buyers, which further limits demand.
2026 Brings Stagnation, But Not a Drop
Despite the slowdown, analysts do not expect a drastic drop in prices. Growth will slow down, but prices will not fall significantly because construction and land costs remain high. A slight decrease is expected primarily for used apartments and in locations with a larger supply. Zagreb and the coast will remain among the most sought-after markets, but with a smaller number of realized transactions. At the same time, initiatives for affordable housing and rental incentives are growing, which could bring greater balance to the market.
Conclusion: The Market Enters a New Period of Stability
The growth of real estate prices, which has marked the last decade, is finally slowing down. Buyers are entering a period of greater balance, while sellers must adapt their expectations to more realistic market conditions. For investors, 2026 could be a year of careful selection, because the market is no longer a race in prices, but a space for thoughtful investments.
If you are considering buying, selling or investing in real estate, timely information and market analysis are the key to success, our team of agents monitors market trends every day and helps you make decisions that protect the value of your investment in the long term.
