Croatia has stepped out of the shadow of war to become the Mediterranean's latest property hotspot...
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Before the break-up of Yugoslavia and the ensuing conflict between Serbs and Croats, almost half a million British tourists travelled to Croatia every year (471,000 in 1990). They came to relax in the ancient walled city of Dubrovnik, to sail and dive in a country blessed with 5,000 km of pristine coastline, and to cruise in warm Adriatic waters scattered with over 1,000 unspoilt islands (67 inhabited). Some also came to sunbathe in the buff (naturism is big in Croatia). During the war years of 1991-1995, the country more or less shut up shop, but since then Croatia has picked itself up, dusted itself down and quickly regained lost ground. British visitors are returning in ever increasing numbers (150,000 last year), and many, spurred on by a strong pound, cheaper flights and booming house prices at home, have much more than a sunshine holiday on their minds. |
Adriatic Alternative
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"The waters on the Adriatic coast are crystal clear, and offshore there are the wonderful islands - a yachties' paradise, if ever there was one. "The climate and diet on the coast are Mediterranean - lots of fish, wine, garlic and olive oil - and the people are welcoming and transparently friendly. I've been going there for over 25 years and really love the place." |
"It's stunningly beautiful, with breath-taking scenery - high mountains and pine forests - and the country has a magnificent coastline with very pretty settlements in coves and bays, each with their own harbour or marina.
Balkan BoomSuch natural assets, of course, haven't gone unnoticed and property prices have been booming at a rate of around 30 per cent a year. And with the country set to join the EU in 2007 many believe the pace is unlikely to flag. But even with that impressive rate of growth Croatia is still very affordable.
Prices vary according to location, but as a general rule of thumb, one bed apartments start at around € 40,000 * and a typical three/four bed detached villa would set you back around € 80,000 *. New-build developments are usually a bit more expensive than period properties, but if you're looking for a wreck to renovate you can find a charming old stone house for as little as €30,000 *- though it is strongly recommended that you use reliable Croatian to project-manage the job for you. Real bargain hunters who want to get away from it all might want to head inland, where you can buy a house for as little as £10,000 - but on the negative side, the facilities will be very limited and the locals won't speak a word of English. At the other end of the market, Russian plutocrats or A-list celebrities looking to escape the paparazzi can purchase their very own Adriatic island for £1-20 million - Robert de Niro, Clint Eastwood and Sharon Stone are all rumoured to be interested. |
Who's Buying?Back in the real world, buyers are typically investors, people in search of a holiday home or retirees looking for a place where their pension will go further. Demand is also strong from people with an interest in yachting and diving - ther are often people looking for a property they can use to set up a diving school or a similar water-based business. |
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"Split is very popular with fashionable young people, whereas "Makarska is a holiday resort popular with families, and Dubrovnik is the most sophisticated and most expensive. The largest of the islands are Island of Brac, Island of Hvar and Island of Korcula - they're all very beautiful, but bear in mind that you have to travel to Split, get a taxi to the ferry port, and then take a ferry. And on the islands public transport is limited so you will be restricted unless you have a car. |
As far as areas go, foreign buyers head for Istria - a peninsula bordering Italy and invariably described as 'the new Tuscany' - the Dalmatian coastline from Split to Dubrovnik ('the new Côte d'Azur'), and the islands off the Dalmatian coast. Investment Potential
From an investment point of view Croatia makes a lot of sense. "Typically investors will make a return of about six per cent after expenses, which is good considering the holiday season here is really only June, July and August.
When they get their act together that will increase from April to October so the returns will be even better - 12-18 per cent. Dubrovnik is the most expensive but also probably the best from a capital appreciation point of view.
Is there an up-and-coming area buyers should be making a beeline for? Our hot tip is Orebic on the Peljesac peninsula, just north of Dubrovnik. "The peninsula is very beautiful and is close to the island of Korcula.
At the moment it's a little bit isolated, but there are plans to build a new bridge connecting it to the mainland and that should really boost values. It's a great place for seafood - Dubrovnik's sophisticates often travel out to Ston to eat, and Orebic has a fantastic beach. Prices are still very affordable, so it's a very good bet.
Such development, of course, raises the question of whether Croatia can manage to avoid repeating the high-rise mistakes that blight some parts of the Spanish coastline.
The Croatians seem determined to learn from that example and have passed strict laws to regulate development - no new building is allowed within 100 metres of the sea and no blocks can be above three storeys.
It remains to be seen, of course, whether a unique landscape preserved by a repressive communist regime will ultimately be spoilt by the freedoms that come with capitalist development.
But for now, at least, the Croatians seem to be winning, and they have miles of pristine coastline to prove it. If you fancy a refreshing alternative to the more obvious overseas destinations, you'll be hard pressed to find a country with as much to offer.
Buying Process
- The downside of buying here is that Croatia doesn't have banks that do mortgages - though some, including the Royal Bank of Scotland, are keen to get a foot in the door.
- That means you'll need cash in your hot little fist to fund your Dalmatian dream home. The crucial point when buying is to choose a property with a good title - thousands of Serbs were displaced during the war and may be allowed to return to reclaim property.
- Britain has a reciprocal arrangement with Croatia so British buyers are allowed own property here.
- A good agent will be able to guide you though the whole process. A ten per cent deposit is usual. Expect to pay a lawyer one per cent of the asking price, a land tax of five per cent, and an agent's fee of five per cent (or more) commission on the purchase price.
- Capital gains tax is payable at 35 per cent but there is no tax if you sell after three years,
Getting There
- British Airways- do flights from Gatwick to Dubrovnik.
- Croatian Airways- fly from Heathrow, Gatwick and Manchester to Split, Zagreb, Dubrovnik and Pula.
- Ryan Air- fly from Stansted to Trieste (near Istria).
Croatian Facts- Population- : 4,437,460
- Capital:- Zagreb (779,000 inhabitants - the administrative, cultural, academic, and communication centre of the country).
- Length of coast:- 5,835 km - including 4,058 km of island, islet and reef coastline.
- Number of islands:- 1,185 (67 inhabited).
- Climate:- Northern Croatia has a continental climate; Central Croatia has a semi-highland and highland climate, while the Croatian coast has a Mediterranean climate. Summer temperatures range from 22 to 26°C in the continental region, 15 to 20°C in the mountain region and 26 to 30°C in the coastal region.
- Population:- The majority of the population are Croats. National minorities include Serbs, Muslims, Slovenes, Italians, Hungarians, Czechs, Slovaks, and others.
- Religions:- The majority are Roman Catholics, and in addition there are a number of those of Orthodox faith, as well as Muslims, and Christians of other denominations.
Note: "No-one mentions the difficulties that the long delay in getting title deeds causes. If you want to let your property, you need a letting licence, for which you need the title deeds. If you stay in your own apartment you have to register with the police at the start of each visit, for this you need the title deeds or at least the contract of sale
* prices as at Autumn 2006
