Real Estate Property Investment Series

Croatia is one of the most likely candidates for entry into the European Union within the next few years and as a result it is also one of the more exciting of Europe’s emerging economies in terms of potential property price growth because with pre-EU entry comes serious foreign direct investment and political and economic stability, and post-EU entry comes greater worldwide confidence in a country and a nation’s ability to trade more directly and favourably with the rest of the European Union.

When you add to this positive news the fact that Croatia has 5,835 kilometres of coastline (1,777 km on the mainland with 4,058 km wrapped around its numerous pretty islands) and a Mediterranean climate you have immeasurable tourism potential that as yet is being massively under-explored meaning that there is an entire marketplace for property investors to explore immediately.

From 2007 a number of UK and mainland Europe based cheap flight operators are opening routes across Croatia which will create accessibility and bring more tourists and therefore it is highly likely that this will increase the profile of the nation and result in a flourishing holiday and second home market as soon as the wider world realises just how stunning Croatia is. In the meantime it means there will be a demand for short term accommodation as well as tourism facing faculties and amenities offering an investor diversity.

The World Travel and Tourism Council have placed Croatia in the top five of all nations in terms of annualized real growth figures for travel and tourism demand from 2007 to 2016; Croatia is expected to achieve tourism demand growth of 7.6% a year for the next nine years meaning that here is a market ripe for property investor exploration in 2007.

One thing that may hold some back from committing to Croatia is the fact that unlike in some other emerging markets in Europe such as Romania for example, property prices in the most popular, populated and beautiful towns and cities in Croatia are already fairly high…but mortgages are widely available in Croatia for residents and non-residents and just a little distance away from the main centres of interest there are bargains galore. Another advantage that the ease of availability of mortgages has is that it means the local population has more access to property based finance and the local market in Croatia also demands property stock…this is good news for an investor. Why? Because tourism potential is good, but having a local market willing and able to take real estate stock off an investor’s hands in the future is even better news. Targeting this increasingly affluent nation an investor has a chance of generating sustainable and consistent returns from a commitment to Croatia for the medium term at least.

Another reason why property in Croatia will be big business in 2007 and beyond is because of an increase in the number of international businesses choosing locations such as Dubrovnik and Zagreb in Croatia as centres for near-shoring back office operations for example. Croatians are hard working, intelligent people who will currently work for lower rates of pay that their counterparts in the EU-15 for example and some companies are establishing operations in Croatia to tap into this labour force and are demanding commercial premises as well as pushing up local demand for residential stock.

Levels of foreign direct investment as well as the number of international companies setting up regional hubs in Croatia also represents a positive factor for investors to bear in mind. FDI and more jobs means a growing economy which often results in a more affluent nation who can and will afford rising real estate prices and rental rates as well…Croatia has already attracted leading international companies such as GlaxoSmithKline, IBM and Siemens, L’Oreal and Nestle to establish regional bases there and what’s possibly even more interesting is the fact that Croatia is becoming a centre for UK and EU domiciled overseas commuters.

The whole business environment is changing as the economy grows, there is active interest for commercial property from Grade A office space in Dubrovnik to logistics and warehousing space in Zagreb, and in the main economic hubs there is intense interest for decent property for sale and rent from an increasingly affluent local and expatriate professional class…could an investor want or expect any more opportunity from a single nation?