Croatia has become the latest country to open up its property market to foreign buyers. From February 2009, they will be able to purchase property on the same terms as local Croats, although forests and agricultural land are excluded from the agreement. Previously, it has been difficult for foreigners to secure permission to buy a property.
Over the last nine years, authorities have only granted just over 3,500 applications from potential foreign buyers; since over 8,000 applications were received in the last two years alone, it is clear that the success rate in purchasing a property in Croatia was not high. In addition to the need to secure permission from the authorities, it was required that Croatian citizens have the reciprocal right to purchase property in the would-be buyers home country.
This right included the US, UK and most of Europe; buyers from elsewhere could only purchase property by forming a company, with its attendant bureaucratic requirements, an option which was also open to those from countries offering reciprocal rights to Croatians.
Chintan Mahida, global property analyst at Nubricks.com
commented, " The move to make buying Croatian property easier for foreign purchasers is bound to have repercussions for the national property market, and bring greater foreign interest especially with expectation that Croatia to become a member of the European Union at some point in 2011."
Presumably because of their relative geographical closeness, most real estate interest has thus far come from Austrian and German buyers, where Croatian is also a minority language. However, once Croatia attains EU membership, it is likely that greater interest will come from other countries.
It is also likely that new air routes will be created in response to growing demand, thus opening up the holiday home and retirement market to a wider market. For British residents looking for an alternative to the crowded markets of Spain and France, Croatia may well hold considerable appeal, being close enough for easy travel back to the UK and well connected to Italy, Germany and Eastern Europe by road and rail.
As is to be expected, the news has not been greeted with joy by many Croats, who fear that, as has been seen in other countries, coastal areas will be colonized by foreign buyers. Much of the Croatian coast is already popular with holidaymakers, being renowned for its scenic beauty, and it would be understandable if local residents fear the prospect of a Croatian Costa del Sol, where prices soar beyond their reach as foreign money moves in.