Is it Worth Buying Property in Croatia Now? May 07th, 2008

Published on 07 May 2008 at 09:35 am
Croatia has been given something of a hammering in the media of late because of its high property prices and the fact that the government seems to be doing less than a good job of protecting prime real estate from being sold off to overseas investors.
Added to these issues is the fact that internationally speaking, there is less money about to be ploughed into property just now and so is it worth buying property in Croatia now or has that bubble burst and is it a market that has emerged in terms of presenting all of its appeal?
Ah well, regular readers will know just how biased we are about Croatia – anyone would think we had vested interests in the nation ourselves! But the fact of the matter is, yes, prices have risen hard and fast in parts of Croatia making it far more difficult to make an investment buck. But that doesn’t downgrade the appeal of the nation – and if you’re willing to back Croatia for the long-term then you will still find plenty to pull you in.
Foreign property buyers seeking so called ‘lifestyle homes abroad’ are still attracted heavily to the coast in Croatia. These types of buyers are typically looking for a holiday home that doubles up as an investment, and they are lured to coastal living. Croatia certainly doesn’t disappoint these buyers – but it’s fair to say that the surge in demand for coastal real estate in Croatia has pushed the prices of property skywards! So much so that you can no longer consider Croatia an emerging market in price terms alone!
These buyers who are happy to have enjoyment from their homes and rent them out to the growing numbers of tourists arriving in the nation will still look at Croatia as a more attractive investment than Cyprus for example, or Malta. These two locations have been made less attractive almost overnight thanks to their adoption of the euro and the resultant effect that this has had on making their property far more expensive to British buyers buying with pounds in their pockets for example.
One suggestion for those who still find Croatia too expensive is to move away from the coast and look inland for investment opportunity. Well, if you look inland for investment opportunities Zagreb comes to mind! As the capital of Croatia it boasts even higher prices than large parts of the coast though, so it is not an affordable alternative!
But if you’re a risk taker and you’re not afraid of hard work you can find stunning, well priced property stock in Croatia’s inner regions…but you will need a good lawyer on your side who can help you determine who has the right to sell you any real estate you are interested in. You will also be going totally against the current trend for foreign buyers in Croatia and will therefore find it difficult to resell or even rent your property out if you want it as an investment.
For those seeking alternative investments in Croatian real estate – what about land banking or buying into the commercial property market instead though? Both will likely stand you in good stead over the medium to long term.

In terms of where the residential market is going, Croatia’s government have been quite famous for the restrictions they have put on planning proposals to protect certain parts of the nation in the past. Backing them up are the people who are becoming more vociferous in their protests against the nation being sold off to foreign buyers. A recent example of this is the public outcries against the proposed sale of part of the island of Piskera in the Kornati National Park.
However, the government of Croatia is also aware that it can strengthen its economy if it has an active real estate market and this of course therefore has an influence on the planning protection – or rather the lack of it. What’s more, as the nation progresses towards EU entry, so it has to free up restrictions on its real estate market. This should give courage to risk averse buyers. In terms of whether there is room for growth in the market – well, pricing needs to be mentioned at this point! Prices have been increasing dramatically and some might say unsustainably and this is certainly worth consideration if you’re a buyer on the verge of buying in now. You are unlikely to be able to make a fast buck by turning real estate around and flipping it back on to the market in Croatia given the current economic climate. That said, Croatia is still downgraded because of its pre-EU status meaning it could witness a strong upward price swing in the medium term again.
What’s more, despite the rise in the cost of real estate, the cost of living in Croatia remains affordable – additionally the quality of life in Croatia is so fabulous. The pace of life is slower, the climate is more attractive than the British climate for example and the people are welcoming. Croatia is improving infrastructure and healthcare standards, it is accessible from the UK easily and affordably…and it is a stunning, beautiful, dramatic and incredibly fascinating country. Unsurprisingly therefore, it is rising in terms of its appeal among would-be overseas retirees. We wouldn’t be surprised if Croatia becomes something of an overseas retirement hotspot after it achieves EU entry therefore – meaning that this is another point worth considering if you’re wondering whether it’s worth buying property in Croatia now.
Source: http://www.amberlamb.com/index.php/a/n/00308-is-it-worth-buying-property-in-croatia-now/