Impact of Tourism on Real Estate Markets in Croatian Coastal Areas

Tourism plays a key role in the economy of many countries, and it is especially important for Croatia, a country known for its beautiful coastline and islands. How does tourism affect the real estate market, particularly in the coastal areas of Croatia?

Increased Demand and Real Estate Prices

The tourist popularity of the Croatian coast leads to increased demand for real estate, whether for purchase or rent. This increase in demand often results in rising real estate prices, making coastal areas attractive to investors.

In addition to the increase in property values, this trend also encourages the development of new projects and the renovation of existing facilities. Investors tend to invest in luxury villas, apartments, and hotel complexes to satisfy the needs and tastes of tourists. This development not only contributes to the aesthetics of coastal areas but also ensures high-quality accommodation that further attracts tourists. However, it is important to emphasize the need for a balanced approach that ensures that real estate development occurs with respect to the local community and the environment.

Infrastructure Development

The growth of tourism also promotes the development of infrastructure, including better transport links, entertainment facilities, shops, and catering facilities. These factors make coastal areas more attractive for living and vacationing, further raising property values.

Improvements in infrastructure not only facilitate access and stay for tourists but also improve the quality of life for the local population. The inclusion of modern technologies, such as smart solutions for traffic and energy management, further raises the standard of coastal areas. Additionally, the development of green areas, parks, and recreational zones contributes to the creation of an urban oasis that attracts both residents and visitors.

Short-term Rental as a Popular Investment

Many investors buy properties on the coast with the intention of renting them out to tourists. Short-term rental has become a popular investment method, with high returns on investment during the tourist season.

In addition to financial profit, short-term rental allows greater flexibility and adaptation to tourist trends. Investors have the opportunity to adjust rental prices depending on the season and demand, thus maximizing their income. This model also allows for a quicker response to changes in the market and tourist preferences, which may include specialized offers or thematically decorated accommodations that attract certain target groups.

Impact on the Local Population

Although the growth of tourism and real estate prices is beneficial for investors, it can create challenges for the local population. The increase in prices can make it difficult for local residents to access housing.

As a result, 'gentrification' can occur, where the local population is displaced from their traditional neighborhoods due to rising prices and changes in the community. Additionally, converting residential spaces into tourist accommodations can lead to a reduction in the availability of long-term rentals, further complicating the situation for local residents. To resolve these issues, it is necessary to establish a balanced approach that protects the interests of the local community while supporting sustainable tourism and economic development.


Tourism has a significant impact on the real estate market in Croatian coastal areas. While it offers numerous investment opportunities, it is important to focus on sustainable development to ensure a balance between profitability and the well-being of local communities.