Building a home in Croatia is still cheaper than in Germany, but costs have grown 64% since 2020 versus 31% across the EU, Croatia Week reports.
According to Croatia Week, which spoke with construction expert Saša Perko, director of DOMinvest, building a medium-standard home in Croatia costs roughly €2,400 per square metre of net floor area including VAT. In German cities the comparable figure is around €3,600. Both figures exclude land, design and other associated expenses, leaving a gap of about 50%. The main issue, however, is the pace of growth. Since 2020 the cost of building apartments has risen by 64% in Croatia, against 44% in Germany and 31% across the EU. Labour makes up around 40% of total construction costs; Eurostat puts the hourly cost at €16.20 in Croatia versus €39.60 in Germany and €44.80 in Austria, though a large share of Croatian construction firms operate informally. Labour costs rose by 11% last year in Croatia and by 3% in Germany, and 52,776 permits were issued to foreign construction workers. Materials have also lost much of their price advantage: a 25 kg bag of cement costs €5.50–6 in Croatia and €5.30–6 in Germany, and material costs are up about 40% since 2020. Administration adds further costs. The World Bank's final Doing Business report ranked Croatia 150th of 190 countries for construction permits, and permit and utility connection costs equal 9.2% of a building's value, compared with 1.1% in Germany and Austria. Last year the average wait from a complete application to a building permit was 169 days. Perko estimates that an extra nine months in the development of a 10-apartment building costs about €775,000. On affordability, the article cites a newly built Zagreb apartment at an average of €3,554 per square metre, against €5,200 in Vienna and over €10,000 in Munich. Mortgage rates in Croatia are around 2.9% versus 4% in Germany. Eurostat data shows 3.7% of Croatian residents spend more than 40% of income on housing (12% in Germany, 8.2% in the EU), while the ECB estimates Croatian property prices are overvalued by 9% compared with 12% in the euro area. Deloitte calculates that a new 70 m² apartment in Zagreb equals 7.5 years of annual salaries, versus 11.7 in Ljubljana and 15 in Prague.