From July 1 of this year the moratorium on the sale of agricultural land to foreign citizens from the European Economic Area, i.e., from EU member states, Liechtenstein, Luxembourg, and Norway, will be lifted. The Ministry of Agriculture has announced that the moratorium can no longer be extended after the European Commission approved it in June 2020. Real estate experts say we can expect an increase in agricultural land prices, depending on which part of the country it concerns, i.e., where it is favorable to invest in agricultural production.
The only legal possibility for foreigners not to acquire land is that the state which has the right of first refusal buys the agricultural land. This is governed by the Agricultural Land Act, in the part concerning the sale of private agricultural land, but the right of first refusal applies only to agricultural lands larger than ten hectares in the continental part, or areas larger than one hectare in the coastal part. The Ministry of Agriculture emphasizes that in this context, in the new financial period (2023-2027), financial instruments will enable the purchase of agricultural land for young farmers without restrictions (in terms of the share of land price in total eligible expenses) through loans.
However, it seems that the main problem will not be the price, but the fact that there is almost no larger agricultural plots available. Because of this, says the director and owner of the Osijek real estate agency German Duško Grgur, land has long since become more expensive. Now, the highest quality land, in Baranja and the vicinity of Vukovar, is sold for 13 thousand euros per hectare, while the price generally ranges from a minimum of eight thousand euros per hectare in Slavonia, depending on its quality and size. Further west, it is somewhat cheaper; for example, in the areas of Nova Gradiška, Bjelovar, and Daruvar, the price is between seven and a maximum of eight thousand euros, says Grgur, but even there it is scarce.
– I am talking about lands of ten hectares and more. This is highly sought after because people want to invest, and as soon as such land is offered, it is sold immediately. Land of a few hectares is not as sought after because it usually does not involve planning a large business, unless someone wants, for example, to connect their land with the one next to it – says Grgur.
Foreign Buyer
This, otherwise the president of the Croatian Chamber of Commerce’s real estate professional group, says that he already has about 30 registered buyers waiting in line to purchase land, among them several foreign individuals. But there is no land, as we mentioned, and due to the liberalization of the agricultural land sales, Grgur expects that the price of the highest quality land will soon rise to 15 thousand euros per hectare.
Land in Lika is even more expensive, where the price has exceeded what Slavonia will only reach. One hectare in Lika costs 16 thousand euros, it is suitable for livestock and certain crop plantations, so the owner of the Karlovac real estate agency Arka global Marin Vrnoga will take a buyer from a foreign country in a few days to take soil samples from an area of 21 hectares. Vrnoga also expects that land prices could rise as July 1 approaches this year, as he does not rule out the possibility of interest from other countries.
As for the Karlovac area, the price there is lower and ranges from six thousand euros, but can reach, he claims, 13 thousand euros. The main criterion is the size of the land; the larger it is, the higher the price, but Vrnoga, like Grgur, says that there are very few larger agricultural plots for sale.
Prices are skyrocketing as we move towards Istria, where prices range from two euros per square meter (20 thousand euros per hectare) to an incredible 40 euros per square meter (400 thousand euros per hectare). It is similar in the vicinity of Zagreb, and all of this is told to us by Tajana Tikulin, a licensed agent and owner of the Zagreb agency Efron nekretnine.
– The parcels are usually smaller, but larger estates can also be found. For example, our agency offers agricultural land with a water connection near Pula of 20 hectares at a price of 6.5 euros per square meter, which is close to the average price in that area – says Tikulin.
This means that the price of one hectare of agricultural land in Istria averages 65 thousand euros. She adds that prices during the pandemic in Istria were somewhat cheaper for those lands near interesting locations for investors and were largely sold at that time. However, Tikulin emphasizes that it is difficult to answer the question about agricultural land prices in a simple way because each property is a story in itself. Nevertheless, she adds, there are some laws that affect everything; for example, among the crucial factors are location, plantations, water…
– Are there plantations in the field, what is their quality, what is their age, is it fenced, is there a well or water connection, and how much digging is needed to reach the main water supply? Answers to these and similar questions can determine the achievement of a certain price – says Tikulin.
Additional Factors Affecting Prices
In the Varaždin area, the price is somewhat lower than in Slavonia, Lika, the Zagreb ring, and Istria, ranging from 50 euro cents per square meter to sometimes up to one euro, as confirmed by the owners of two local real estate agencies. This depends on the location, quality of the land, which agricultural crop is in question, as well as the size of the parcel. This practically means that agricultural land of one hectare would cost five thousand euros, sometimes even more. The price of agricultural land there has not significantly changed in recent years.
