Travel Tuesday: A holiday home in Croatia

Travel_Tuesday_CroatiaCrystal clear, clean water, 1,800 miles of coastline, 1,200 islands as well as many historic cities and top quality restaurants make Croatia a popular holiday destination. The country benefits from its central location in Europe: Croatia is very easy to reach by car from South Germany, Austria, Switzerland, Slovenia and Italy. It is not surprising that many tourists wish to a purchase a holiday home in Croatia.

The interest in purchasing holiday homes has significantly increased after Croatia joined the European Union (EU) on July 1, 2013. “In the first quarter of 2014, we are registering an increase in requests by around 30 per cent compared to the same period last year. Especially buyers from Germany and Austria are showing an increased interest in exclusive holiday homes on the Adriatic Sea”, says Michael Grimm, Managing Partner at Engel & Völkers in Rab and Opatija. Given the growing demand, Engel & Völkers is experiencing significant price increases in holiday homes in popular regions of the country.

Among the most desirable locations for buying a second home are the Opatija Riviera, the Istrian Peninsula as well as the island of Rab. On the Opatija Riviera, top quality villas with particularly high quality facilities and sea view in very good locations achieve top prices of up to €1,500,000. In good locations up to €750,000. In addition, the Istrian Peninsula is attracting the attention of international buyers. Natural stone houses are particularly in demand here. For an exclusive property, prices of up to €500,000 in very good locations are paid. Holiday homes on the island of Rab in the Kvarn Bay are likewise popular among potential buyers. Most second homes on the island are only a few metres from the sea and offer views of the offshore islands. Buyers pay between €400,000 and €500,000 for single family homes with approximately 200 square metres of living space in the best locations. For freehold flats or apartments in very good locations, prices per square metre of up to €2,000 are achieved.

 Positive factors inspire the Croatian real estate market

The general conditions for buying a holiday home in Croatia have significantly changed for the better in recent years. Thus, foreign investors have meant that the construction quality of properties has improved enormously. “In Istria, the Opatija Riviera and also in neighbouring areas, such as Zadar, high quality villas and freehold flats or apartments are increasingly becoming available for sale in western European construction quality and appearance on the market”, says Michael Grimm. Furthermore, the land registry was changed electronically and the property is listed very quickly these days. Thus, buyers from the EU are put on an equal footing with locals under land registry law. Since Croatia joined the EU, buyers now may also rent out their holiday homes. “This was previously not possible and is now particularly interesting for investors”, adds Michael Grimm.

90 per cent of buyers come from abroad

The Croatian real estate market is currently being dominated by buyers from Germany and Austria. In addition, eastern Europeans are, particularly buyers from Slovenia, on the lookout for high quality holiday homes in sought-after locations of Croatia. Many requests are increasingly also coming from interested parties with Croatian roots from all over Europe and the USA. Most buyers have sufficient equity at their disposal and are not dependent on financing or funding. Among international clientele, properties with direct sea views or near the sea are particularly in demand. Many prospective customers attach particular importance to large balconies and terraces as well as to western European features of the property. Likewise, air conditioning, laminate flooring and a modern bathroom are important to buyers. Due to the high demand from abroad, Engel & Völkers expects a shortened marketing period in Croatia this year. Currently, the marketing period in very good locations is two to six months, in good locations four to twelve months.

Expect further price increases in the coming months

Michael Grimm estimates that the residential real estate market in Croatia will show extremely positive signs in terms of its further development. “We are experiencing much more viewings and genuine intentions to buy from foreign buyers as a result of Croatia joining the EU. In comparison to Spain or Italy, the prices for holiday homes in Croatia in the best locations are still relatively low. Nevertheless, the growing demand makes us believe that there will be a significant price increase in holiday homes in Croatia in the coming months”, says Michael Grimm.

If you are interested in a second home in Croatia, contact our local partners for more information.