All photos: Edward Weston
Enquiries for Croatian property jumped 30 per cent in the first quarter of 2014 year-on-year, according to Engel & Volkers, a significant rise that the agent says is fuelled by the country’s accession to the EU.
German and Australian buyers are leading the rise interest, Michael Grimm, Managing Partner in Rab and Opatija, writes on the agent’s site .
Engel & Volkers are not the only agents to see an increase in interest. First Property Croatia have also seen demand climb in recent months.
Tim Coulson, director of the agency, tells TheMoveChannel.com they have seen a “considerable increase in interest” thanks to returning confidence in the global economy combined with the media attention Croatia received when it joined the EU.
“Prices have remained stable so we have not see any dramatic price rises from the transition,” he explains. “[Croatia’s EU membership] gave those who were already considering Croatia confidence to proceed.”
Sales have increased since summer 2013, although Coulson predicts that low supply of property for sale on the market will hold back transactions from further rises.
“We are now focused on selling resale and waiting for the developers to start building again,” he says. “This will take time and is likely to be on a smaller scale to start with as developers come back cautiously into the market.”
The market has improved in a number of ways, though, in the last year. The land registry has been transferred to an electronic system, which processes ownership records at a far faster rate, which makes buying real estate more attractive to those from overseas.
Construction quality has also improved “enormously”, thanks to foreign investment, says Engel and Volkers, even if construction activity remains low.
“In Istria, on the Opatija Riviera and in neighbouring regions such as Zadar too, more and more exclusive villas and apartments are coming onto the market with a western European standard of building work and a western European look,” adds Grimm.
Eastern Europeans, particularly those from Slovenia, have joined the buyers from Germany and Austria, he says, with most activity driven by investors who have Croatian roots. Holiday homes are top of the list, with interest high in properties close to the coast or boasting direct sea views.
As a result of this increased demand, the agent is now forecasting a rise in prices.
“We are registering significantly more viewing appointments and genuine intentions to purchase from foreign buyers,” he continues. “Compared to Spain or Italy, the prices for holiday homes in Croatia in the very best locations are still relatively low. That said, the growing level of demand means that we are anticipating a considerable rise in prices for holiday properties in Croatia over the coming months.”
With ongoing restrictions in supply, the gradual improvement in European economic confidence and solid demand, First Property Croatia are less bullish on price rises, but also forecast that values will climb in the more popular areas over the coming 2 to 3 years.
The agents are absolutely in agreement on one thing, though: “Now is a good time to buy in,” says Coulson.
“Croatia is not flavour of the month, but the local are buying in and prices in the “A” locations are rising. This is sure to spread out to wider area as confidence continues to grow. It should also be noted that rental yields are strong when considering the rentable income verses current prices.”