Croatia targets 9,000 affordable apartments by 2030 to address soaring real estate costs

In response to skyrocketing real estate prices driven by Croatia’s booming tourism industry, the government has unveiled an ambitious National Housing Plan to construct approximately 9,000 affordable apartments for sale and rent by 2030, EUalive’s partner Siol.net reports.

This initiative aims to alleviate the housing crisis that has made homeownership and rentals increasingly unattainable, particularly for young people and lower-income families in urban centres like Zagreb and coastal tourist hubs such as Dubrovnik and Split.

Deputy Prime Minister and Minister of Spatial Planning, Construction, and State Property Branko Bačić announced the plan, emphasizing its role in addressing the acute housing shortage.

Croatia’s real estate market has seen dramatic price surges in recent years, fuelled by its status as a premier tourist destination. The influx of foreign buyers, particularly in coastal areas, and the rise of short-term rental platforms like Airbnb have driven property prices to levels unaffordable for many locals.

In Zagreb, for instance, average apartment prices have soared to over €3,000 per square meter, while coastal cities report even higher costs, exacerbating the housing affordability crisis. This phenomenon mirrors challenges in other Southern European tourist hotspots, such as Spain and Portugal, where similar dynamics have priced locals out of the market.

In Spain, for example, cities like Barcelona and Lisbon face comparable issues, with real estate prices inflated by tourism and foreign investment. In Lisbon, the average price per square meter has climbed to €4,000 in prime areas, while Portugal’s Algarve region sees similar trends due to its appeal to international buyers and short-term rental demand.

Both Croatia and Portugal are grappling with the dual pressures of tourism-driven economic growth and the resulting strain on housing affordability, prompting government intervention to prioritize local residents’ access to homes.

Under Croatia’s National Housing Plan, adopted in March 2025, half of the 9,000 planned apartments will be allocated for non-profit rentals, while the other half will be sold at a capped price of €2,104 per square meter. The construction cost benchmark is set at €1,315 per square meter, including VAT, to ensure affordability.

The Agency for Legal Transactions and Real Estate Brokerage (APN) will oversee the project, with municipalities expected to finalize their housing programs by 2026, identifying local needs and suitable construction sites. Bačić expressed confidence that the newly introduced Affordable Housing Act and revised pricing benchmarks will enable Croatia to meet its 2030 target, overcoming previous setbacks in public housing projects.

The government’s socially-stimulated housing construction program (POS) has faced challenges, with only 9,126 apartments built over the past 23 years and a mere 169 constructed in 2024—down from 300 in 2023. Rising construction costs and contractors’ bids exceeding legal price limits have stalled progress, prompting legislative reforms to streamline the process. The new pricing framework aims to ensure financial viability while maintaining affordability for buyers and renters.

To further expand housing options, Croatia is launching an Affordable Rental Program, set to enter public debate soon. This initiative incentivizes private property owners to lease apartments to the APN for non-profit rentals, offering compensation based on local median rental prices.

For example, owners of a 65-square-meter apartment in Zagreb leased for six years could receive approximately €50,000, with €31,000 paid upfront and the remainder after three years. Tenants will pay income-based rents to the APN, with the state covering the difference between non-profit and market rates, ensuring affordability for renters and fair returns for owners.

The plan also targets young people seeking their first homes, particularly in smaller towns. The government will co-finance the renovation and construction of 363 apartments across 50 municipalities and 130 family homes in 11 areas, with €113 million allocated from the National Recovery Plan. This initiative aims to revitalize less urbanized regions, encouraging young families to settle outside overcrowded tourist centers.

Croatia’s success will depend on efficient execution, robust municipal cooperation, and sustained funding to deliver on its promise of accessible housing by 2030, ensuring that the benefits of its tourism boom do not come at the expense of its residents’ ability to secure a home.

Caption: A view from Saint Ivan Fortress in Sibenik, Croatia, 19 April 2025. Sibenik is a historic Dalmatian town built in the 15th and 16th centuries, and today it is one of the leading tourist destinations in Croatia. According to data from the Croatian National Bank (CNB), tourism in Croatia recorded significant growth in revenue from domestic and foreign tourists in the past year (2024), generating 14.99 billion euros in revenue. EPA/ANTONIO BAT