Property market in Croatia
Just found this article on the Croatian property market, quite interesting read:
Over the past five years property prices have increased around 20% a year from Istria down to the southern tip of Dalmatia. 'As Croatia is on its way to becoming a member of the EU, an average increase in Croatian real estate prices of 100% to 150% can be expected over the next three to five years,' says Chris Kälin, partner at Henley & Partners, Zurich-based international tax and property consultants. 'Infrastructure improvements, as well as the legal and institutional stability that are integral to EU membership, will make Croatia even more appealing than it already is to foreign investors.'
Compared to many parts of Mediterranean Europe, property prices are relatively attractive. Situated in a Dalmatian village overlooking the Adriatic and 15 minutes from Split is an off-plan development of one to three bedroom apartments priced from €95,000. In Dubrovnik, above the old town, is a two bedroom apartment with a garden and expansive views for €225,000. Both are available from Dream Property Croatia, part of the Savills network.
If your heart is set on buying in the historic centre of Dubrovnik, beware that prices are on a dramatic upward swing. Reported in the Croatian press was the recent sale of a 44-metre sq. apartment for €15,000 per sq. metre, the highest price ever paid in the old town. 'This is a-typical,' remarks a local estate agent who puts the normal Dubrovnik price at around two thirds or less per sq. metre.
Away from the much sought after historic Dubrovnik, prices per sq. metre will be substantially lower. On the pine tree laden Adriatic island of Hvar, Male Rudine Villas is an upmarket development of 11 freehold houses each with three to four bedrooms, stone fireplaces, terraces, private Mediterranean gardens, swimming pools and sea views. Prices from €450,000 to €669,000 work out at around €2,500 a sq. metre.
With nearly 6,000km of island and mainland shoreline, there are plenty of new coastal developments on the planning board. Adhering to strict zoning regulations, Property Republic, for example, will be launching a substantial and attractive new marina development later this year.
As more foreign direct investment flows into the inland capital city Zagreb, property prices are going up. Croatia Holiday and Home (CHH) is selling a number of new two bedroom apartments near the historic centre for €130,000 and up. Its managing director, Martin Westby, author of How to Buy Property in Croatia (available through the CHH website) says: 'Prices are rising around 15% per annum and compared to many other European capitals, Zagreb represents good value.'
In the exclusive Vrhovec, Šestine area of Zagreb with views of the surrounding hills and the city, Lancana is constructing eight buildings of five apartments, each with two to three bedrooms and a modern fireplace starting at €177,000.
When it comes to the countryside, CHH is selling a farm near Zagreb with vineyards, orchards, stables and a house needing total modernisation for €55,000.
Pitfalls and practicalities
Croatia is not the easiest place in the world to purchase property. Bureaucracy is cumbersome, estate agents are unregulated and there remain many post-war land claims as yet unresolved. With pending EU membership though, Croatia is adjusting its laws and regulations to comply with EU standards.
There are two ways of buying Croatian property. Foreigners can purchase either as an individual or through a company. 'While an individual must be approved by the Ministry of Justice – a process that may take six months and more – company ownership does not require ministry consent and is quicker,' explains Kälin. See Ministry of Justice for details.
When it comes to potential pitfalls, pay particular attention to the title deeds. The World Bank warns that Croatia must improve its method of property registration. The existing system dates back to the previous political regime. 'In the past many owners acquired real estate either by inheritance or other statutory means, and became owners but never registered their real estate in the land register,' warns Dr Nenad Saljic, director of Henley & Partners in Croatia’s second city, Split.
18 May 2007, 07:17 Karl
Thanks for the great article on the real estate investment front there in Croatia!
Where are you located Karl? And what convinced you to move to the location you did?
I'm an American gearing up for "discovery trip" to Croatia. Get the lay of the land. Explore the country. See everything firsthand. Interested in forming an LLC, purchasing real estate and embarking on some type business venture there.
Karl, (or anybody reading this), please don't hesitate to email me - it would be most welcome.
I would love to email/speak with you or any expats/businesspeople with experiences in Croatia. Any suggestions, ideas, or caveats...let me know.
Thanks again for the article, Karl - if there's any new information the readers of this forum might enjoy or benefit from...please post again!
Bruce 03 Sep 2007, 08:39 - Report