At a virtual presentation on February 5, 2026, organized by the Institute of Public Finance, Federica De Pace, Economist on the Croatia and Czechia desk in the OECD Economics Department, presented the second chapter of the 2026 OECD Economic Survey of Croatia, Tackling housing challenges in Croatia. 

Housing affordability was once primarily a matter of social policy, but today it is also crucial for economic development. In the past, housing economics and policy were mainly focused on assisting low-income populations and vulnerable social groups. However, over the past thirty years, affordable housing has become a broader economic issue that impacts the competitiveness of cities and national economies.

Property prices in Croatia have risen significantly due to strong demand from both domestic and foreign buyers, rising construction costs, and limited housing supply. The restricted availability of housing is, among other things, a result of a large number of vacant apartments and an increase in short-term rentals, which reduce the number of long-term rental options. As a response, Croatia adopted in 2025 the National Housing Policy Plan until 2030, which included a comprehensive tax reform, including a property tax, to encourage better utilization of the housing stock.

The OECD analysis highlights that further tax reforms are needed to increase fairness and efficiency in the housing market. Developing a private long-term rental market and expanding social and affordable rental housing would support labour mobility and better protect vulnerable households. A more efficient land-use policy, faster building permitting procedures, and higher productivity in the construction sector are needed to support housing supply where demand is greatest.

The presentation was moderated by Dubravko Mihaljek, co-editor at the journal Public Sector Economics. Presentation and a recording are also available.