An imminent royal trip to Croatia from the King and Queen of Norway highlights the development on eastern Hvar near Sucuraj, billed as the new Cannes. The royal partners are due on an official trip to Zagreb and the seaside town of Sibenik on May 12-13, accompanied by 100 Norwegian businessmen, who are investigating investment opportunities in the former-Yugoslav republic as reported suite101.com.
Croatia is beginning to become more and more well-liked as a vacation destination. Interested in purchasing a place on an Croatian island, flat in a quiet Dalmatian town, commercial property in Dalmatia or land plot for a bigger investment? According to the Law of Croatia real estate, foreign voters and enterprises can be owners of real estate in all of the teritory of Republic Croatia (Istria, Kvarner, Dalmatia, Continental Croatia, and all Croatian islands).
Croatian property enquiries for the winter period of 2010 to 2011 are up from the previous year. They are still a long way from pre crisis levels but a significant rise never the less. Exchange volumes are still low but the number of sales converted is rising and stockholders who’ve been showing interest during the last twelve months are starting to commit. With improving industrial conditions globally and a signs that confidence is returning in Europe, all be it slowly and cautiously, it would appear that the trend should continue in 2011.
One thing’s for sure, Croatian real-estate agents are truly working for their commission. This is no bad thing. It has reduced the number of players in the market considerably. It in addition has raised the standards as buyers ask considerably more questions, and generally look far more closely at price. This has forced Croatian property agents to be more competent, informed and armed with reasoned arguments rather than the standard sales patter. It has helped control the Croatian property market a little better as costs paid are pragmatic. There are no men with black brief cases sneaking round the corner prepared to pay five times more than the property is essentially worth. Those times are well behind us and happily so.
Price-wise, without regard for reports of falls of between 5% and 10%, in fact Croatian property costs have fallen more like 20% to 30%. The reason behind the disparity is due to advertised and actual sales values. This is particularly true for properties in Croatia coastal locations where a lot of the property is acquired by foreigners and where transaction volumes are so low that information is restricted, so much so it is difficult to quantify. Furthermore the existing system of monitoring Croatian real estate costs is fairly ineffectual due to a absence of correct information. The main source of data is that of the tax office, where contractual costs of Croatian property sold are registered. However , the practice of manipulating contractual costs for tax purposes is still typically found in Croatia making available info untrustworthy.
In the tidal locations, foreign property owners are loads more inclined to drop costs. Most of them have experience similar price drops in their domestic markets and have promptly become accustomed to the idea that property is worth less than it used to be and that costs are relative. As an example a serious number of foreign owners have sold property in Croatia, to take advantage of declining prices at home, preferring to reinvest domestically. We see this trend continuing throughout 2011.
When considering the Croatian market direction for 2011, it’s also vital to take a look at Croatia’s industrial and political situation. Now Croatia is going thru its own crisis of confidence, not least with the economy. Nonetheless considering the state of plenty of the other peripheral EU economies as well as it’s comparative size, Croatia is not alone. It is definitely no worse than Greece, Ireland, Portugal, Spain and potentially Belgium and is probably better in several instances. The country actually has not been bailed out by the Western European Union or Global Financial Fund yet Additionally, as the EU is making an attempt to introduce a more strategic and coordinated economic policy approach, Croatia, soon to be an affiliate, should benefit.
Additionally Croatia is tackling the issue of corruption head on. There have been countless high-profile arrests including the arrest of Ivo Sanader the former prime minister, as well as a number of his ex ministers and it seems like this is just the beginning. With the press now having free reign in the democratic process stories of new executive officers and their mysterious wealth are hitting the news on a constant basis. It would appear that Croatia is rather unique with respect to its open tries to tackle corruption. Born by it’s need and drive to join the European Union Croatia, unlike Romania and Bulgaria, as well as some of the more established states of the EU, has needed to be brave and cope with this tricky problem up-front of Croatia ECU Advent.
This has understandably caused some negative sentiment from foreign backers short term. But then investors are being wary for a similar reasons they are cautious just about everywhere in Europe currently. We only truly see this changing once the banks start to lend again bringing with it a change in sentiment. This is particularly the argument for the second houses market. Nevertheless medium to long-term, and more precisely after Croatia joins the ECU end of 2012, things are sure to improve.
How can this affect the Croatia property market? Short term we are expecting there to be continued downward pressure on real-estate costs in Croatia, but with transaction volumes rising as purchasers and speculators look to take advantage of bargains as well as some solid Croatian property investing opportunities. This is true for both the foreign and domestic consumers. Medium term we are expecting to see Croatia join the EU, nevertheless it remains to be seen how much of an effect on Croatian real estate costs it’ll have. There are two distinct probabilities, a moderate and stable effect or an inflationary drive. It’ll principally depend on the EU itself and if it is in a position to resolve it’s own issues and repair confidence in its own capability to manage and unify it’s members on the essential fiscal regulation so as to forestall the same sovereign credit problems some of it’s members are at present facing, and very significantly the impact which has on it’s other members and the EU itself.
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Tags: travel, croatia, destination
