The number of internally displaced people (IDPs) in Croatia has fallen significantly since the armed hostilities between the Croat majority and the Serb minority ended in 1995. By December 2005, the total was considered to be between 5,000 and 7,000 including 1,700 ethnic Serbs. These figures disguise a huge disparity in return patterns between ethnic Serbs and Croats. While 99 per cent of the over 220,000 ethnic Croats displaced by the conflict have returned, little more than one-third of the over 300,000 ethnic Serb IDPs and refugees have been able to do so. In addition, about two-third of past returns are not sustainable, according to spot-checks and estimates by international organisations and NGOs. For the remaining Croat IDPs, the main obstacle to return is the poor economic conditions in return areas. For Serb IDPs, the main barriers to return and reintegration are property, housing issues and lack of employment opportunities, as well as continuing discrimination.

However, significant progress has been made by successive governments since 2000 in reforming legislation and adopting measures in favour of Serb return. While implementation has been slow and is still subject to resistance at local level, repossession of private property is nearing completion; having been barred from reconstruction assistance in the past, Serbs represented 70 per cent of beneficiaries in 2005.