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| | The Croatian Islands - The Adriatic Vacation Resort Paradise
With its medieval cities and a coastline dotted with largely unspoiled islands, Croatia has been a natural destination for many of Europe’s real estate dollars in recent years. 
Despite government action this year to simplify house purchases for European Union citizens, real estate brokers report few new projects and flat demand.
In March 2009 a new law was introduced as part of Croatia’s drive for E.U. membership. It gave E.U. citizens the same rights as Croats when buying most types of property.
Britons had been some of the country’s most enthusiastic foreign buyers in recent years but with lack of cash and funding sources the "global crises" has struck these players out. Recently the market has seen a shift away from traditional markets like the U.K. and Ireland, toward newer places, such as Czech Republic and Belgium. Historically this would indicate that the more conservative, all-cash investors are now taking advantage of the opportunity.
The coast had been the country’s most popular region for both investors and vacation home buyers, especially the area between Split and Dubrovnik, as well as the Istrian Peninsula to the north.
T1 sites are designated for hotels and T3 regions for camp sites. Villas and apartments can be built in T2 zones, but only for rental use — so ownership generally is limited to development companies and investment funds!
 Note of caution: Croatia previously was part of Yugoslavia, a country where most of the land and property was owned by the state. So if some land was nationalized at some point, then there can be some doubts over claims to that land. Many people were uprooted from their homes in the conflict that followed Yugoslavia’s collapse. Under the Dayton Accords, which ended the conflict in 1996, all those uprooted are allowed to return home — although few actually have done so, resulting in a large number of abandoned homes around the country. Ownership of such properties could prove contentious. It is very important for any foreign investor to have a proper lawyer who will do due diligence on any property.
The Good: In the last year, prices have fallen perhaps 20 to 25 percent overall. The average price in the highly overpriced Dubrovnik region, one of the most popular locations, is around €3,100 per square meter. This is a more realistic price than it was, and makes it definitely a bargain time. The price would be $411 per square foot.
It is expected that prices will fall further. In a recent survey of 50 Croatian real estate agencies published in the Zagreb daily Vecernji, 65 percent of respondents said they expected prices to fall in the next 12 months, with 33 percent saying they would stay the same. |
