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The Close Visit Of King Harald V And Queen Sonya Of Norway To Croatia Has Raised The Profile Of Development Plans To Turn Land Near Sucuraj, On The Eastern End Of Hvar Island, Into A Resort Rivaling Cannes
An imminent royal trip to Croatia from the King and Queen of Norway illuminates the development on eastern Hvar near Sucuraj, billed as the new Cannes. The royal partners are due on an official trip to Zagreb and the tidal town of Sibenik on May 12-13, accompanied by 100 Norwegian businessmen, who are investigating investing opportunities in the former-Yugoslav republic as reported suite101.com.
Croatia is becoming more favored as a holiday destination. Curious about buying a home on an Croatian island, apartment in a quiet Dalmatian town, commercial property in Dalmatia or land plot for a bigger investment? According to the Law of Croatia real estate, foreign citizens and enterprises can be owners of real-estate in all the teritory of Republic Croatia (Istria, Kvarner, Dalmatia, Continental Croatia, and all Croatian islands).
Croatian property enquiries for the winter period of 2010 to 2011 are up from the year before. They’re still some distance from pre crisis levels but a major rise never the less. Transaction volumes are still low but the amount of sales converted is rising and backers who’ve been showing interest during the past 12 months are beginning to commit. With improving business conditions internationally and a signs that confidence is returning in Europe, all be it slowly and cautiously, it would appear the trend should continue in 2011.
One thing’s for sure, Croatian real-estate agents are truly working for their commission. This is no bad thing. It has reduced the amount of players in the market significantly. It has also raised the standards as buyers ask significantly more questions, and generally look far closer at price. This has forced Croatian real estate agents to be more competent, informed and armed with reasoned arguments instead of the standard sales patter. It in addition has helped to control the Croatian property market a little better as prices paid are pragmatic. There are no men with black brief cases lurking round the corner ready to pay 5 times more than the property is actually worth. Those times are well behind us and happily so.
Pricewise, regardless of reports of falls of between 5% and 10%, actually Croatian property costs have fallen more like 20% to 30%. The cause of the variance is due to advertised and real sales values. This is particularly true for properties in Croatia coastal locations where lots of the property is bought by foreigners and where exchange volumes are so low that data is constrained, so much so it is difficult to evaluate. Similarly the existing system of monitoring Croatian real-estate costs is fairly ineffective because of a absence of accurate data. The primary source of info is that of the tax office, where contractual costs of Croatian property sold are registered. Nonetheless the practice of manipulating contractual costs for tax purposes is still common in Croatia making available info untrustworthy.
In the seaside locations, foreign property owners are much more inclined to drop costs. A lot of them have experience similar price falls in their domestic marketplaces and have quickly become used to the idea property is worth less than it used to be and that costs are relative. For example a significant number of foreign owners have sold property in Croatia, to use falling prices at home, preferring to reinvest regionally. We see this trend continuing through 2011.
When thinking about the Croatian market direction for 2011, it’s also significant to have a look at Croatia’s economic and political situation. Now Croatia is going thru its own crisis of confidence, not least with the economy. Nonetheless considering the state of many of the other peripheral European economies as well as it’s comparative size, Croatia isn’t alone. It is certainly no worse than Greece, Ireland, Portugal, Spain and potentially Belgium and is perhaps better in many instances. The country certainly hasn’t been bailed out by the EU Union or Global Financial Fund yet Additionally, as the EU is making an attempt to introduce a more strategic and coordinated industrial policy approach, Croatia, shortly to be a member, should benefit.
Additionally Croatia is tackling the issue of corruption head on. there were many high visibility arrests including the arrest of Ivo Sanader the former P. M. , as well as a considerable number of his ex ministers and it seems like this is just the beginning. With the press now having free reign in the democratic process stories of new executive officials and their mysterious wealth are hitting the news on a consistent basis. It would seem that Croatia is somewhat unique with regard to its open tries to tackle corruption. Born by it’s need and drive to join the European Union Croatia, unlike Romania and Bulgaria, as well as some of the more established nations of the EU, has had to be brave and deal with this tricky problem upfront of Croatia EU Advent.
This has understandably caused some negative sentiment from foreign backers short term. But then investors are being cautious for the same reasons they’re cautious pretty much everywhere in Europe right now. We only actually see this changing once the banks start to lend again bringing with it a change in sentiment. This is particularly the case for the second homes market. Nevertheless medium to long-term, and more precisely after Croatia joins the EU end of 2012, things will improve.
How can this affect the Croatia property market? Short term we expect there to be continued downward pressure on real-estate costs in Croatia, but with exchange volumes rising as buyers and investors look to use bargains as well as some solid Croatian property investing opportunities. This is right for both the foreign and domestic buyers. Medium term we expect to see Croatia join the EU, however it remains to be seen what proportion of an effect on Croatian real-estate prices it will have. There are two distinct probabilities, a reasonable and stable effect or an inflationary drive. It will mostly rely on the EU itself and whether or not it is in a position to resolve it’s own issues and repair confidence in its own ability to manage and unify it’s members on the necessary money regulation in order to prevent the same sovereign debt issues some of it’s members are presently facing, and of greater importance the impact which has on it’s other members and the EU itself.
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