Determinants of real estate prices in Croatian counties

This paper examines the determinants of real estate prices across Croatian counties, taking into account not only economic and demographic factors, but also tourism-related variables. The main focus is on spatial spillover effects, which are based on the assumption that real estate prices in one county are influenced by the developments in neighboring counties. The study covers the period from 2011 to 2019 and confirms that real estate prices are influenced by both local and regional factors. The key determinants include the number of tourist accommodation units, population size, and GDP per capita. An important result is the existence of a statistically significant spatial dependence across all specifications. This indicates that changes in real estate prices extend beyond county boundaries, underscoring the interconnectedness of the real estate market. These results underline the need for using spatial econometric models, which provide a more comprehensive understanding of regional price dynamics by capturing spillover effects between counties.