Author Leaonne Hall is an expert on the overseas property market and has written extensively for a number of newsstand titles. She previously produced three editions of the Red Guide to Buying Property in Eastern Europe, and has been writing in detail on the individual markets since 2003.
Described by George Bernard Shaw as the ‘Pearl of the Adriatic’, there are many reasons–not least the weather, low cost of living, high quality of education, low crime rates and good healthcare–to choose to buy in this stunningly beautiful country.
Why buy in Croatia?
With over 6,000km of beaches and 1,100 offshore islands, Croatia is a truly fascinating country. A few years ago it was tipped as being the next big property market and was soon labelled the ‘new Tuscany’.
Proving increasingly popular with British buyers–over 300 properties were sold to Brits in 2004–it’s unlikely that Croatia will ever rival the popularity of the Bulgarian or Polish markets. Nevertheless, it can offer the investor appreciation rates of as much as 20–40% in some areas.
The country remains undeveloped, and this is something of a Croatian passion. One of the major attractions is that the Croatian government has pledged to protect the country and its natural beauty and coastline against over-development. With a stable government and prosperous economy, the country is more developed than many realise, with an effective infrastructure and many modern towns and cities.
There are no restrictions on foreign buyers, who enjoy the same rights as domestic/local buyers. With plenty of direct flights from the UK and a flight time of under three hours, reaching the country is also cheap and easy. Potential EU membership is only serving to increase the popularity and investment potential of Croatia as the usual price hikes are expected once membership occurs, probably in the next two years. Some estimate that prices could rise by as much as 300% by 2010.
Politics and economy
Historically, Croatia has always been a prosperous country, and following a period of war and recession, today it averages a GDP growth rate of between 3% and 4%. Croatia is a steady democracy that’s well on track for joining the EU. The currency, the Kuna, is stable, having been shadowing first the Deutschmark and then the euro. Inflation is low but unemployment is relatively high, although this varies depending on the season. The Croat economy is a mixed one, with 30% attributable to industry, 7.9% to agriculture and 62.1% to services such as tourism.
Croatia became a parliamentary democracy back in 1991 and today is a democratic republic. The President is Stjepan Mesić and the Prime Minister Ivo Sanader. The EU has pledged to invest €76 million to help Croatia meet the requirements set for membership of the EU, which demands that they strengthen their economic, social, political and democratic systems.
Geography and climate
Situated in the heart of Europe, its long, crescent-shape dominates the Adriatic coastline. As with many Eastern European countries, the geography is diverse. Travel away from the rugged coastline and you’ll hit vast fertile plains, mountains, gorges, valleys and vineyards.
The country is divided into several different regions, the main ones being Istria in the north, Kvarner in the centre and Dalmatia to the south; all three are unique in both climate and appearance. Almost 10% of the country consists of eight national parks, including dense forests of oak, beech and black pine, which are home to lynx, bears and wolves. Thankfully, the country lacks any sort of heavy industry and so the natural beauty which has led to many parts of Croatia being listed as UNESCO World Heritage sites has remained unspoiled.
The most well-known part of Croatia is its 6,000km-long coastline, which runs from Istria in the north to Dubrovnik in the south. It’s dominated by more than 1,100 islands and boasts a Mediterranean climate with mild winters and warm summers. Inland the climate turns colder, but the summers are hot. Zagreb, Croatia’s administrative and cultural capital, is situated inland in the hilly region of Zagorije. The lingua franca here is English thanks to the presence of many multinational companies, a lot of which employ foreign staff.
History and culture
Following WWI, Croatia became part of the Kingdom of Yugoslavia, with Italy controlling much of northern Dalmatia up until 1943, and this is reflected in the Italianate influence seen in the area. Following the German invasion in 1941, Yugoslavia was ruled by the facist group, Ustasa. They attempted to ethnically cleanse the country by sending all the Serbs back to Serbia, and when attempts were made by the Germans to clamp down on their activities, Ustasa began an extermination programme, which left between 60,000 and 600,000 Serbs, Jews and Roma dead. What followed was a war which left around one million dead, as the Croats and Serbs united under Marshall Tito to expel Ustasa. At the end of the war, Croatia became one of five countries in the new communist Yugoslav Federation, ruled by Tito. However, Croatia–along with Slovenia–soon sought autonomy, feeling hamstrung by the less developed republics. In 1990, following a decade of economic crisis, Croatians voted for independence and freed themselves from communist rule. At the same time, the 600,000 Serbs living in Croatia also demanded independence, leading to the outbreak of war which lasted for six months and saw the deaths of 10,000 people. Fighting broke out again in 1993 and 1995 when the Croatians retook occupied territory, finally displacing the Serbian population. The country remained in a perilous state until 2000, when the Socialists gained political control and pledged a series of political and economic reforms which were designed to catapult Croatia into the European mainstream.
Culturally, Croatia has a long and colourful history, with many historic places and monuments, including six World Heritage sites and eight national parks. Among the most well-known Croatian sites is Dubrovnik, the old town of Hvar and the natural beauty of the town of Mljet.
Around 90% of the country is Catholic, with the remainder of the population a mix of Orthodox, Protestant and Muslim.
Tourism and getting there
Prior to conflict in the Balkans, more than half a million Brits used to holiday in Croatia each year. Today there are over 8.5 million foreign tourists visiting Croatia, making it the 18th most popular tourist destination in the world. Recently undergoing something of a revival, the country is once more attracting hordes of tourists and has reclaimed its reputation as being a playground of the rich and famous. Today tourism accounts for 22% of the country’s GDP and given the vast swathes of unspoilt coastline, islands and cultural sites, it is easy to see why Croatia is such a popular destination. Once the country joins the EU–membership is set for 2009–it is believed that the tourist industry will grow by almost 7% per annum.
Croatia is most famous for its sailing and hiking and has rapidly become one of Europe’s most popular diving locations. All along the coast there are a string of natural parks including Risnjak and Palenica. Inland there are the elegant streets of Zagreb, while coastal Dubrovnik, Hvar and Rovinj are popular. While there is ample opportunity for rentals in Croatia, be aware that the hype that has been attached to the country–describing it as the new Spain and Tuscany rolled into one–is rather farfetched.
Getting to Croatia is relatively easy, with both British Airways and Croatia Airlines offering regular flights from London to Zagreb. There are now also budget flights available with Ryanair flying into Pula in northern Croatia and easyJet serving Split and Rijeka.
Cost of living
Prices are slightly higher in Croatia when compared with many other Eastern European countries–whereas beer is £1 a pint, in Montenegro it is 33p. Be aware that prices do vary widely by region. An espresso in a rural district north of Zagreb could be 3.5kn (32p), jumping to 5kn (46p) on the coast. In general, living costs are lower than in Western Europe but may be higher than places like Serbia, Bulgaria and Romania. A meal for two with wine would cost you 150kn, (£14) while half a litre of local beer is 10kn (91p) in a bar, or 6kn (55p) in a shop. Eurodiesel is 6.91kn/L (63p) and petrol super 7.72kn/L (70.5p).
Food and drink
The Croatian diet focuses on homegrown vegetables and freshly made pizza and pasta, with local markets selling handmade bread and freshly-grown vegetables. On the coast, excellent locally-produced wines complement the flavoursome pasta, pizza and fish dishes, while pork is the most popular meat. There are many seasonal specialities, ranging from wild asparagus in April to world-famous truffles later in the year. In eastern Croatia, food is spicier, with paprika added to dishes such as pork kulen.
Wine can be bought for as little as £2 in the shop and there are a number of vineyards which produce some fantastic vintages. The Istrian region is known for its reds–Terans, Merlots and Cabernet Francs–while in Eastern Slavonia, some excellent whites are produced.
Beer ranges from local specialities through to international brands.