Rising renovation costs make older flats less affordable

Croatia’s property market continues to show no significant signs of falling prices, despite a slowdown in the number of transactions.

While the supply of new-build homes largely depends on the pace of construction, demand remains strong in the market for older flats.

However, as Poslovni dnevnik reports, buyers are increasingly facing a major additional expense: renovation.

For many older properties, refurbishment involves replacing installations, flooring, windows, kitchens and bathrooms, adding substantially to the overall cost of purchase.

Property prices continue to outpace wage growth across the country.

Older flats in Zagreb typically sell for between €3,000 and €3,500 per square metre, while prices in Split can exceed €4,000 per square metre in sought-after locations.

In Rijeka, prices generally range from €2,500 to €3,000 per square metre, while Osijek remains more affordable, with prices between €1,800 and €2,300 per square metre.

According to market estimates and data from Emajstor, basic renovation costs currently range from €400 to €600 per square metre.

Comprehensive refurbishments, including new installations and fittings, usually cost between €700 and €1,500 per square metre.

As a result, renovating a 60-square-metre flat can easily cost between €45,000 and €70,000, with more extensive projects costing considerably more.

Analysis shows renovation expenses now account for around 20 to 35 per cent of the total investment, and potentially more in older buildings where unforeseen structural or installation issues arise.

Experts advise buyers to carefully assess a property’s condition before purchase and to set aside at least 15 per cent extra for unexpected works.

With labour and material costs continuing to rise, renovation has become a key financial factor in determining the overall value and affordability of a property investment.

The figures also highlight growing affordability challenges across Croatia, as the combined cost of purchasing and renovating an older flat increasingly approaches the price of a new-build home.