Mission Impossible: Why young Croats can’t afford a home

Zagreb

For many young people in Croatia, owning a flat is becoming more of a dream than a possibility.

With property prices soaring and wages struggling to keep up, more and more are being pushed out of the market—and in many cases, out of their homes.

As HRT reports, Sara’s story is one of many. She was living alone and enjoying her independence, but when property prices sharply rose in summer 2023, she had no choice but to return to her grandmother’s home.

Her friends faced the same struggles. Although many of them work hard and earn solid wages, buying a home simply isn’t an option.

“I don’t know anyone who can realistically take out a loan for a flat. Even with good jobs, it’s just not possible,” she told HRT’s Labrint show.

Jelena has been house-hunting for five years. Living and working in Zagreb, she hoped for a market correction—but instead, prices kept climbing.

Even properties an hour outside the city can cost €100,000–€200,000 and still require further investment.

“How can anyone afford to build or buy for €200,000–€300,000? We don’t have cash, inheritance, or property to fall back on,” Jelena explains.

An ordinary 50-square-metre flat in Zagreb’s Kustošija neighbourhood can cost €200,000, despite not being luxuriously fitted. With an average salary around €1,500, most young buyers are limited to a €150,000 mortgage—far below what the market demands.

Žana and her fiancé have also been looking for over a year, focusing on Novi Zagreb. They were shocked by the poor quality of many new buildings—and even more surprised that investors often demand 70% upfront payment.

“We’re not looking for luxury—just a basic, safe place to live. But it feels impossible,” Žana says. “If we can’t afford a home with good jobs and salaries, who can?”

Architect Janko Kralj points to a deeply flawed housing model. For over three decades, housing in Croatia has been left entirely to private developers, with no strategic state policy. The result? A flooded market of overpriced, poorly built flats with little regulation.

“We don’t question where the money comes from. Nobody asks how someone has €200,000 in cash to buy a flat,” he says.

Kralj believes the cost per square metre in Novi Zagreb shouldn’t exceed €2,500. But in reality, it’s closer to €4,000—and when interest on housing loans is included, it jumps to €6,000.

He also warns that cheap, quality housing is simply not being built.

“Everyone talks about supply and demand, but that’s misleading. There’s massive demand for affordable housing. Developers just don’t want to build it.”

Instead, many chase quick profit by building low-quality housing without proper planning or architectural design. Kralj criticises the ease with which these projects are approved, calling out a lack of oversight and ambition among some professionals.

The situation is worsened, he says, by state-subsidised APN loans, which often help people buy poorly designed, substandard homes.

Taxpayers are effectively funding bad housing under the guise of helping first-time buyers.

“Imagine if the Ministry of Defence ordered 200,000 substandard pistols with no criteria. That’s what we’re doing with housing—paying for homes that aren’t fit for purpose,” he says.

As prices rise and quality drops, confidence is fading. Young people like Sara fear things will only get worse.

“They’ve been saying it’ll improve for years. But nothing’s changed. If nothing is done, I don’t know what the future looks like,” she adds.