Should You Invest?
Croatia, then, still offers great investment potential. Despite
not being the financial bargain it once
was, it does remains hugely popular with British and
European tourists alike, meaning demand is sustained in its
property market. The beauty of the country makes it an attractive
place either for emigration or for investment in property in order
to accommodate the many thousands of tourists each year. The
accession of Croatia to the EU will only ease the property buying
process for foreigners, but the attached price rise will mean
pre-accession investment is recommended for those looking to make
the higest gains.
- The country has a number of natural advantages as a tourist
destination, including an average of 2,600 hours of sunlight a
year, brilliant sandy beaches, a large number of Venetian-style
towns and Dubrovnik, one of the world's best-preserved fortified
cities.
- There are plenty of direct flights from the UK with a number of
low-cost carriers now flying to all five coastal airports as well
as the capital.
- Croatia has a strong tourist rental market.
- Taxes aren't over charged and the rates are moderate although
transaction costs are high.
- Any restrictions on foreign ownership should be abolished when
Croatia joins the EU between 2009 and 2010.
Rental Yields
Croatia has a strong rental market and it is the ideal location
to earn profits from good rental yields. Although houses in Croatia
aren't as cheap as they once were, thriving tourist industry
investors who buy-to-let their property can see good returns.
Currently yields stand at 5.8% per annum; this is on top of good
capital growth.
Price History
As stated above, property prices in Croatia have been rising
quickly, and compared with other Eastern European countries, they
are high. However, Croatia is a well-placed and attractive country,
sometimes dubbed as 'the new Mediterranean', and when compared to
equivalent properties in Spain, France and Italy, prices here are
consistently 30% to 40% cheaper. 1 bed apartments built in new
developments on popular islands such as Brac and Korkula are
available at around £45,594 ($91,700), whilst a two-bedroom
apartment in a central off-plan development with sea views can be
found for £90,553 ($182,111). Dubrovnik, which is said by some to
be overpriced, has small apartments from £32,322 ($65000) and 3 bed
villas from £124,315 (€250000).
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