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26 Aug 2007

A Guide to Property Investment Croatia

Croatia View 

The virtually untouched beauty of Croatia is becoming a favourite for holidaymakers, expatriates and investors alike.  With its picturesque villages dotting the Adriatic coastline and pristine forests and mountains within its interior, Croatia offers something few destinations can boast – truly unspoilt landscapes.  Considering this, Croatia is fast becoming a rising star on both the real estate and tourism scenes.

With fast growth potential and strong government leadership, Croatia is one European destination that many investors are standing up and taking notice of right now.  We at specifically highlight the following 10 reasons as prime factors bolstering interest in and commitment to property investment in Croatia: -

1) Government Stability and Unified Focus Within Croatia Leads to Property Investor Confidence

Although the Croatian government is a relatively new democracy, it has made incredible strides in a short time.  With a strong government programme backing involvement in European and global politics, Croatia is making a name for itself.  Whilst Croatia did experience some turbulence in the 1990s, the 2000s have been very favourable for the growth of its Parliamentary Democracy form of government.  Croatia is in the midst of a number of reform programmes to make the country more stable and to increase its welcome at the European Union's table.  As Croatia brings itself up to Western European standards, the government's stability and firm leadership are inspiring property investor confidence.

2) The Nation's Strong Bid for European Union Entry is Welcomed by Real Estate Investors in Croatia

The Croatian government has been working very hard to bring its country up to European Union standards.  Whilst it still has come kinks to work out of the system, ascension is anticipated sometime within the next few years.  Already, the fledgling Croatian government has become active in world affairs - it is a member of the UN, the World Trade Organization and a number of other international organisations and bodies for example.  The country's relations are especially good with the UK, which is supporting its EU bid if certain reforms are carried though.  Impending entry into the EU and strong ties with the UK constitutes welcome and good news particularly for British investors.  In addition to this, property prices in Croatia are beginning to climb in anticipation of its entry to the EU which draws in international investor interest.

3) Croatia's Economy is on the Rise, Giving Investors A Reason to Look Closely at the Property Sector

Croatia doesn't have the biggest economy in Europe by any means, but it isn't the most populated nation either and per head it is doing well.  With an estimated 4.5 million citizens, Croatia's EUR 30.9 million GDP rate makes a great deal of sense.  With an annual growth rate of 4.3% and prospects for the future looking even brighter, the economic strength in Croatia is certainly on the increase.  The country's major industries include shipbuilding, chemicals, pharmaceuticals and tourism.  With EU membership on the horizon, Croatia's already stable economy looks like it will get even stronger.  This is very confidence inspiring for property investors who seek the comfort that already established economic stability offers.

4) Croatia's Natural Attraction is Attractive to Holidaymakers, Expatriates and Investors Alike

Much of the attraction of Croatia for holidaymakers, immigrants and investors is in the fact that a wide expanse of the nation's landscape remains untouched by development.  This is incredibly appealing for tourists who want to get away from the concrete jungles found across much of Europe and America.  A Yale University survey completed in 2002 ranked Croatia 12th in the world for preserved, unpolluted natural habitat.  Croatia came in well above other European countries traditionally considered unspoilt and stunningly beautiful such as Italy, Spain and Greece for example.  Although the Croatian government is committed to attracting tourists as well as foreign investment dollars and development, it is not willing to do so at the expense of its environment.  This is a huge selling point for Croatian tourism and a massive USP driving property investment.

5) Diverse Geography Also Attracts Property Investor and Tourism Interest

To say Croatia's geography is diverse is an understatement.  Within its 56,542 square km expanse, investors, holidaymakers and expats find a little bit of something to suit just about every taste in terms of landscape and climate.  The country is bordered by Serbia, Bosnia and Herzegovina, Montenegro, Slovenia and Hungary and it also enjoys an incredible expanse of Adriatic Sea coastline directly across from Italy.  Its geography boasts beach front property, rolling hills, mountains, plains, rocky outcroppings and more. In addition, Croatia's offshore land includes more than 1,000 unique islands.  The climate here ranges from continental to Mediterranean, depending on the region in question and all this variety means that Croatia has what it takes to appeal to a number of different holidaymaking tastes and therefore a number of different investment strategies and property types.  This is incredibly good for investors who seek diversification in their geographical strategies and even better for visitors that might want to visit the beautiful Adriatic shores one week and then take in some incredible mountain vistas the next.

6) Growing Tourism Industry Bodes Extremely Well for Investors in Property in Croatia

With its incredible expanse of Adriatic Sea coastline, beautiful weather, unusual architecture and unspoilt landscapes, Croatia is very popular with holidaymakers and expatriates.  The World Travel & Tourism Council anticipates 2007 economic activity on the tourism front to equate to roughly USD 13 million dollars, whilst that number might seem relatively low, the anticipated demand increase between 2008 and 2017 is incredibly encouraging to investors looking to cash in on tourism.  The growth rate per annum is predicted to be 7.8% which is massively above the global norm.  Bookings in Croatia from US citizens are up 69% and the British government estimates more than 250,000 Britons travel to Croatia a year.  These figures are expected to increase dramatically over the next few years, particularly the British figures as Croatia and Britain's ties become even stronger.  Beyond the sea and mountains, Croatia's cities, historical sites and plentiful national parks all beckon to holidaymakers, and naturally the path the majority of property investors are taking is the jet to let path to target maximum tourism rental gains.

7) Favourable Exchange Rate Makes Croatia Very Attractive for Investors, Expats and Holidaymakers

With an exchange rate that is very favourable for Britons, it is little wonder so many UK citizens are taking Croatian real estate investment so seriously.  The present rate is approximately 11 kuna to a single pound.  When this is considered in light of the low cost of living, investors here gain confidence knowing their money will take them far and knowing that it will also draw in tourists, expats and retirees providing bases upon which income and exit strategies can be planned. 

8) Improving Accessibility and Infrastructure Positive Factors for Croatian Property

As Croatia attracts the attention of investors and holidaymakers, it is also enjoying a reworking of its infrastructure and experiencing strong interest from transportation companies.  Major infrastructure improvements designed to make travel within the country easier for citizens and holidaymakers alike include a new highway between Zagreb and Dubrovnik and a new roadway system for Dalmatia, which includes the Peljesac Bridge.  In regard to easy travel, Edinburgh Airport has announced a direct route to Dubrovnik starting in 2008 with Flyglobespan offering the service.  As more improvements come into play and more low-cost air carriers cater to the region, Croatia's connections to the west and with its potential visitors and investors will become even stronger.

9) Real Estate Boom is Making Croatian Property Attractive

As foreign interest in Croatia and its beautiful Adriatic coastline continues to boom, so too does the property market.  Add to this the flurry of buyers wanting to get in prior to the country's EU ascension and it is clear Croatia is a very interesting and attractive place for investors to look.  According to UK's Channel 4, property prices have been climbing by 15% per annum and are expected to go up by 50% or more in the short term.  Whilst the prices are on the upswing, they are still incredibly affordable by Western European standards.  Buyers can still find choice property within Croatia in the GBP 50,000 starter range.  The promise this market presents is very attractive for investors who want quick returns or who are planning on investing in real estate to rent for income generation and long term capital appreciation purposes.

10) Low Cost of Living and Distinct Italian Flavours Make Croatia a Unique Destination That Captures Holidaymakers and Investors' Attention

The strong Venetian influences in Croatia are evident in everything from the culture and food to the architecture.  Although the Venetians only ruled over the region for a short time in the Middle Ages, they certainly left their mark.  This unusual styling blended with a real Eastern European flair is very attractive for holidaymakers who want to witness unusual sites and take in some Italian culture without paying Italian prices!  The cost of living in Croatia may be high by Eastern European standards, but it is by no means high for Westerners.  This unusual juxtaposition and blending of cultures makes Croatia highly attractive for holidaymakers and property investors who want to buy-to-let to take advantage of the growing tourism trade for example.

As Croatia works hard to make itself a fully fledged member of the EU, holidaymakers are starting to take real notice of this country.  In turn, property investors are finding Croatia offers them such a great deal of diverse potential.
Category: Croatia Property

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