Traditionally, international investors have not been permitted to buy property in Croatia, but, from next month, all that will change and foreigners will be able to buy homes on the same terms as local Croatians – something which should provide a huge boost to the property sector…
Croatia has been a candidate country for EU membership since June 2004 and its negotiation to become the 28th member of the European Union could be complete next year.
This, along with the Croatian Government’s decision to open up the property market to foreigners is likely to increase international demand for Croatian property, and potentially drive property prices right up.
Currently, only Croatians can buy land and foreigners can only buy Croatian properties such as flats and buildings - hence the sky high prices for old style houses in popular holiday spots. When you purchase a property, you are buying the house and the right to re-build it, not the land it stands on.
Furthermore, potential buyers from some countries have, up to this point, only been permitted to buy property in Croatia by forming a company and even then, this would be subject to reciprocal rights being issued to Croatians to buy property in the would-be buyer’s home country.
Foreigners have always found it hard to secure permission to buy homes in Croatia. Since early last year, the Croatian authorities have only given to go-ahead to around 3,600 overseas applications out of almost 8000, which is a low approval rate. But that is all set to change.
From next month, overseas nationals will be permitted to buy property in Croatia on the same terms as local Croatians, although the existing restrictions placed on buying agricultural land and forests will not change.
These new changes look to drastically alter the second home and investment market in the country. Those seeking a holiday home are drawn mainly to the coast, for the stunning views and strong rental potential.
Whilst prices look set to rise further, the cost of living in Croatia remains affordable and the quality of life on offer is very highly regarded.
You are unlikely to be able to make a wad of cash by turning a property around and flipping it back on to the market in Croatia given the current economic climate.
That said, Croatia remains downgraded because of its pre-EU status, meaning it could witness a strong upward price swing in the medium term again.
Due to its climate, improving infrastructure and healthcare standards, Croatia is also becoming very popular with retirees.EU and me
At the end of last year, Olli Rehn, the European Commissioner for Enlargement, gave a positive assessment of Croatia’s prospects of EU membership.
Rehn said that membership talks with the Croatian Government could be wound up by the end of 2009 and they should be looking at membership by the end of 2010 or early 2011.
But, despite these positive noises, Croatia still faces obstacles to its goal, including a territorial dispute with neighbouring Slovenia, which, as an EU member, could obstruct Croatia’s negotiations.
Slovenia has vetoed the opening and conclusion of a number of areas in Croatia’s entry talks over the 17-year-old dispute which involves a few slivers of land and a stretch of sea border on the northern Adriatic.
But now, it looks as though Slovenia could unblock Croatia’s EU accession talks within a few weeks if there is agreement on mediation suggested by Brussels to solve a border dispute. Croatia wants the dispute settled before the International Court of Justice in The Hague.News submitted by Jon Moore, The Move Channel