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The Croatian Property Market
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The Croatian Property Market* Real Estate sales did not exist until after the war. The family home would be passed down the generations with the new names being added to the title deeds. The population of Croatia is now around the 4 million mark and nearly that many again emigrated through the many troubles the country has witnessed in the last 50 years. On a regular basis you will find ’absent people’ on title deeds and it may be quite tricky to get them over from Australia or America to sign your paperwork. According to Croatia Estate the average purchase price is 150,000 Euros and there are various ’hot spots’ such as Dubrovnik, Hvar and Istria. In September 2003 the 10 o’clock BBC1 news ran a feature saying there was a property boom in Croatia and it was the place where the smart money was going It seemed to concentrate on Dubrovnik and featured a large stone house on 3 floors for 10,000 euros in need of refurbishment. In my opinion such properties do not exist-certainly not with clean papers - it struck me as a straightforward publicity stunt. Unless you have an offer on a property with clean title the sale will never complete. Alternatively if you pay in full to obtain possession with a house without clean title eventually the government will come looking for its 5% purchase tax and then you would lose the house. It is almost impossible to accurately price the Croatian Property market. There has been some press copy recently saying 300 Brits bought last year, which everyone now seems to be quoting. I have tried to investigate this figure because my experience would tell me that the numbers are much lower than that. According to the Foreign Office in Zagreb just 8 British people received ’permission’ last year, which is obviously different from ’buying’. There may be a boom in Istria fuelled mostly by the German market-where prices have supposedly increased by 50% in the last 12 months, but in terms of prices throughout the rest of Croatia they still represent excellent value in comparison with Italy, France and Spain. Indeed if Istria has experienced that kind of capital appreciation then presumably there is hope for the rest of Croatia achieving similar figures in the run up to potential EU membership. Other factors that will add to the equation will be the new motorway and new budget carriers entering the market. The usual purchase system (see how to buy) where you enter into a pre contract with a 10% deposit whilst applying for permission can cause problems in a rising market. If a vendor breaks a pre contract he owes you double the deposit as a payment. However there is a point if permission drags on for over a year where it may become tempting to a vendor to pay you the double deposit if the price of the house has increased sufficiently to make it worthwhile. The agents who advertise in my newsletter are tending towards a system where you gain full possession and the vendor receives full payment and you apply for permission after completion. There appears to be 2 main ways to achieve this goal-either by buying as a Croatian Company or through contract wording by your solicitor. Prices may also be higher if using property search agencies as naturally enough the local people try to increase their profit as soon as a westerner appears on the scene. This is the danger with property search agencies, as they tend to advertise in the local press and people soon realise they are buying for foreigners. As the property market becomes more mature and property valuations become the norm rather than the exception then house prices may become more of an exact science until then it a question of deciding how much a property is worth to you and whether in comparison with similar properties in other countries like Spain France, it looks good value. Should Croatia achieve its aim of EU membership in 2006 or 2007 then there will have to be an equalising of prices across the region which suggests the Croatian market is currently undervalued.

Living costs in Croatia Non-Residents’ tax is 1,60 US$ for sqm of the housing space annually Ground-tax is 0,26 US$ per one square meter annually
Reserves are 0.52% of the market value of the property annually
Garbage costs are cca 53 US$ annually
Electric costs - one kWh is on 1.02.2000 US$ 0.058
Water costs - one cubic meter of water is on 1.02.2000 US$ 1.18
Insurance for the house and household amounts generally to US$ 530 annually. P
rice Guide for the Croatian coastline It is very difficult to pigeonhole prices to properties -obviously there are various "hot spots" and getting "warmer spots"! It is a rising market but when compared to equivalent properties in Spain, France and Italy they are consistently at least 30-40% cheaper, and in my opinion Croatia is a much nicer country - the Med as it was 30 years ago. Bargains still come up and you need to move quickly when they do and will tend to be now in slightly more obscure places. As a very general guide the following may be of help (prices in Euros): 

- 30,000-40,000 Entry budget level for ruins/Basic land plots
- 50,000-60,000 One bed apartments/Larger Ruins/Land Plots
- 70,000-90,000 Basic stone house in need of refurbishment/Larger land plots
- 100,000-120,000 Larger stone house in need of refurbishment/cosmetic work/2-3 Bed Apartments
- 130,000-150,000 Restored small stone houses/All of the above closer to the sea/airports/tourist towns
- 160,000-220,000 Restored large stone houses/luxury apartments
- 250,000-350,000 Large Houses and apartments with land and/or first/close to the sea
- 400,000-750,000 Large luxury properties, close to sea, very close to major airports and tourist hot spots
- 750,000+ Commercial opportunities/Castles/Ex-palaces

Retiring Britons may Look to Croatia, Bulgaria, Turkey for Affordable Homes. In fewer than 10 years an estimated 2.3 million Britons aged over 50 - one in eight of the population - will be retiring abroad, according to a report by Alliance & Leicester International. By 2020, one in five older people will be living outside the UK. Driven by rising affluence, the number British retirees owning two or more homes in Europe, will double from today’s levels, with destinations such as Croatia, Bulgaria and Turkey emerging alongside the traditional Spanish Costas, France and English-speaking countries. The global market for goods and services for British retirement migrants will be worth more than £100 billion in 2020, by which time one in five retirees will be living in "smart homes" employing sensors, voice recognition and other gadgets. According to Simon Hull, managing director of Alliance & Leicester International, tourism is encouraging Britons to move abroad. Lower living costs, a more sedate pace of life, a healthier climate and year-round sunshine are the main attractions. "Many people will worry about currency fluctuations, so will sway more towards developed countries. Europe has special regulations for healthcare, so migrants are covered for a proportion of the costs," says Hull. Education is another reason for retirement migration. In the US, Pennsylvania State Universityhas a special campus for the over 55s and soon "grey universities" will be established in attractive destinations. By Martin Westby, source www.croatia-holidayandhome.co.uk


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