Zagreb Sees Strong Rental Demand Growth

The Croatian capital Zagreb is experiencing strong growth in rental demand, leading to a rise in rental costs in the capital.

Not only are the prices in the Croatian real estate market rising but also the monthly rent of an apartment is on the way up.

The latest data released by property website Crozilla has shown that the cost of renting an apartment in Zagreb has risen from an average of 350 euros last year to an increased cost of 400 euros now.

Not only are rental prices rising but also the demand. In September alone demand for apartments ranging from 20 to 40 metres squared was up by 14 per cent on last year.

Medium sized apartments, measuring between 40 and 60 square metres saw rental costs rise even further, up by 19.4 per cent year-on-year in Zagreb.

These mid-range apartments, known as commercial apartments, saw the largest price increases, and are particularly attractive to both home and overseas property investors, offering strong rental yields.

Larger apartments measuring around 100 square metres also showed growth, up by 8 per cent year-on-year as rental demand grows.

Rental demand in the popular city of Dubrovnik is also strong and prices are rising.

In Dubrovnik however, the main problem is finding a landlord that is prepared to rent their property on an annual basis.

The vast majority of landlords in Dubrovnik take advantage of the tourist trade and rent on a holiday let basis to visitors throughout the summer. They can then rent to students during the off season from October to June to supplement their income.

This has created a shortage of rental properties available for annual rental, increasing demand from families looking for stability.

The increasing rental demand in both Zagreb and Dubrovnik can represent opportunities for overseas property investors to obtain a strong yield for their investment, be it on a holiday let basis or long-term rental.