There is no question that Croatia is an exceptionally beautiful country, with a vast, largely unspoiled coastline and over a thousand lovely islands. There are plenty of opportunities in Croatia for sailing, shipping, scuba diving and snorkelling. The climate is generally perfect for much of the year and the lifestyle is as laid back as it gets. The people are exceptionally friendly and nice to foreigners.
With so much going for it, Croatia has everything it takes to be one of the best overseas property destinations in Europe. So what do the property trends in Croatia 2016 indicate?
For sure, there is a lot of confidence in Croatia, with more people buying homes than ever before. The prices of luxury properties in the country are up by quite a lot since the 2008 global economic recession, but still 30% below the highs witnessed just before 2008. This means they are priced perfectly for those looking to invest here.
Indeed, according to reports from real estate firms across Croatia, the number of enquiries from abroad has shot up by 30% in the last 12 months. Much of the interest in Croatian properties comes from Russia, Germany, Austria and several Eastern European countries.
Michael Grimm is a real estate expert in Croatia who has observed the market from up close. He talks about the new rise in demand for prime real estate in Croatia coming from abroad: “As a result of EU entry we are registering significantly more viewing appointments and genuine intentions to purchase from foreign buyers. Compared to Spain or Italy, the prices of holiday homes in Croatia in the very best locations are still relatively low. That said, the growing level of demand means that we are anticipating a considerable rise in prices for holiday properties in Croatia over the coming months.”
Most foreign buyers look for traditional stone homes close to the sea, which they identify Croatia with. That’s so because most have discovered Croatia while coming on sailing trips here and love the vast unspoiled coastline and the easy access to world class sailing facilities.
What makes Croatia so attractive for foreign buyers is that it is one of the safest countries in the world, with an exceptional law and order situation and a low crime rate. However, there are some issues such as the slow moving bureaucracy and the red tape that exasperate expats like Mark Thomas from Kent in the UK who have made Croatia their home.
Mark has been living in the Croatian city of Dubrovnik since 1998. He says: “Croatia is a new country and there are still some teething problems. The red tape can be frustrating and the scheduled flights from Dubrovnik to the rest of Europe dry up in the winter. There have been a few situations where foreign buyers have been taken advantage of by dubious agents and have fallen foul of confusing paperwork.”
There are legal hassles that foreign buyers face when purchasing properties in Croatia such as the fact that some properties have multiple owners, some of whom have either left the country or are dead. So, it can be really difficult to get every single owner of a property to agree to its sale. There is a huge backlog of land registry files in Croatia that remain stuck with local authorities and getting title deeds of a property can sometimes take many months, if not years.
The Croatian government has been hard at work to make buying properties easier for foreigners. Russians, for example, who are the main buyers of Croatian properties, can now buy a house directly without having to set up a legal entity such as a limited company, for the purchase.
The reason for the rule change was because many in the Croatian government felt that asking Russian buyers to purchase their homes in Croatia through a company was putting them off from the country and driving them to other countries with more favourable policies on property transfer to foreigners such as Bulgaria and Hungary.
Croatia has simplified its legal regulations related to the purchase of property by quite a lot, with the goal of attracting more foreign buyers to the country and to make it one of Europe’s best overseas property destinations. So far, things have been moving in the right direction.