What will be necessary to make the Croatian real estate market finally free of this crisis? It appears that all the efforts of local banks and the state have so far not led to a significant shift for the better and to make matters worse there has been no significant fall in prices. In such circumstances it is difficult to sell a property, as evidenced by the increasing number of cancellation of agencies and many agency employees losing their job.
It seems that the only effective solution is increased investment on the market. The Croatian market can not independently initiate a significant investment cycle because there are not enough investors and it is also a small market compared to others. What we are waiting for in this situation is the stronger growth of the largest European markets, which should lead to a new investment cycle in Croatia.
Continuation of negotiations for accession to EU will send a message to investors about stabilization and potential benefits of investment in Croatia. The fact that Croatia is closer to entry into the Union combined with a defined strategy and investment incentives could create a new interest among investors and encourage foreign investment.
What is now hindering new investments across Europe are low rates of return, so investments of most countries are lower as much as 60% compared to the first half of last year. However, as 2009 is getting closer to the end increased investments are expected in most countries, and it is also expected that the next few years will bring more stability regarding the rate of return. Currently the banks are also not helping a lot with their limited offer of loans, and if they even give credits then they do it by much more stringent conditions. All this has a bad effect on the real estate market and it is a part of the reason for current slow pace of recovery.
Fortunately, good news are coming from the United States of America, Canada and Asia, so next year we expect more investors from these countries, especially from China, whose investors could start up the sleepy commercial real estate market.

There are two separate roads to making a real estate investment in Croatia. One is to buy as a private citizen and the other is to buy as a business company. Both ways have their advantages and disadvantages, which will be explained in this text.

If you go for private ownership, you must first be aware that EU citizens have the same rights as Croatians, while non-EU citizens have to come from a country that has a reciprocity contract with Croatia and must also get an approval from the Croatian Ministry, which means the whole process can last for a couple of months, depending on the circumstances. Private ownership has it’s advantages in the fact that once you buy your property in Croatia, you no longer have any more problems with book keeping, company accounts, taxes, and VAT returns. On the other hand, you can not get your VAT back after buying furniture or anything else you need to make your real estate representable, and you also need to wait a couple of months to get the Ministry approval, although you will not be rejected and you are practically the owner of your property.

Another way to buy real estate in Croatia is to open your own company, which is especially useful if you are not a EU citizen. All you need is the name of your company, an accountant, a bank account with an initial deposit of 20,000 Kunas, a company stamp and a contract with your company’s function that has to be notarized in the public notary office. This can take up to 2 months and the best way to do this is to authorize a lawyer to do it instead of you. Advantages of investing in property through a company are the fact you don’t need to wait for a Ministry approval, you can claim your VAT return, when you decide to sell the property you actually transfer your company to a new owner and 5% land tax does not have to be paid and the last thing you should know and can be very profitable is the fact that as a company you can rent out the property and earn some money, which would not be possible for a private foreign citizen. The only bigger disadvantage of this way of buying property in Croatia is that you need an accountant for your company who will charge you a monthly fee of approximatly 100 Euros.

US magazine Business Week recently announced that the financial crisis and recession, which hit many countries around the world, opened doors for individuals for investment in real estate. As a desirable country for such a purchase, it lists of Croatia and Montenegro. Specifically, prices of flats and houses in some countries have fallen drastically in relation to the 2007, and many owners are struggling with loans for which they were forced to set lower real estate prices.
As a result, customers are in much better position in negotiations to reach an even lower price. Portals for real estate in the UK and the USA carried the news that the real estate market in Croatia lately opened to foreigners who can buy property under the same terms as domestic people. As the advantages of our country, they highlight the natural beauty of the Adriatic, but also improving infrastructure and health care why Croatia is becoming more and more interesting to retired people.

Franck Ruimy, investment manager from London, was looking for apartments for European investors when he came to the conclusion from the title of this post.
While wealthy Americans, scared because all that is happening, keep away from investments in trophy real estate, Mr. Ruimy invested in some new apartment buildings in Manhattan. His plan is to buy them as much as possible on a discount and rent while awaiting long-term increase in prices during the next few years. Sounds interesting, right? Well Mr. Ruimy is so confident of success that he has so far spent over 30 million dollars, and it is expected to invest 250 to 300 million dollars in the end!
Happy shopping began as a way of exploiting the euro strength against dollar. It was still before the problems in the market became clear to majority of buyers. Ruimy said that and even then he was able to negotiate significant discounts. Today, the deterioration of the real estate market represents an opportunity for a good job.
Given that Franck Ruimy is one of the famous personalities in Europe’s real estate world, a man who has invested billions of dollars in real estate across Europe for private investors and institutions, whose company now operates a real estate worth more than 9 billion dollars, the advice should not be easily wasted.
And what says Mr. Ruimy in the end?
“I am always everywhere in search for bargaining. Is the right time for business with real estate!”

The geographical position of Rijeka is crucial for its tourist image. This is where a visitor in transit meets the sea for the first time. The access to Rijeka is extremely attractive and the access from the sea offers the most charming view on the city. The natural and cultural features, the Mediterranean climate, surroundings of the mountainous landscape add to the value of the city. The area around Rijeka represents the most developed tourist region in Croatia, with a tradition dating back to the 19th century and the times of Habsburg nobility. By being the third largest city in Croatia and an important business centre, Rijeka has developed into a strong centre of business tourism and it hosts important business events, so congress tourism increasingly gains on importance. Trsat, the centre of Marianism in this part of Croatia, makes Rijeka the centre of religious tourism as well. The town is almost grown into one with Opatija - the oldest and the most renowned tourist centre in Croatia.
Apart from quality accommodation, shops, theaters and entertainment, visitors can attend important cultural events.

Here is some more facts about Rijeka. It is a city and port on the northern coast of the Kvarner Gulf, cutting deep into the mainland. Population of the town itself is 167,964 and the metropolitan area numbers almost 300,000 inhabitants. An average temperature in January reaches 5 °C, and in July 22.8 °C. The annual rainfall is 1,600 mm with 2,120 hours of sunshine a year.

Good connections with the hinterland, modern port facilities and strong naval and commercial tradition helped Rijeka to develop into Croatia’s biggest port. It also represents an important European transit port. Rijeka is also a cultural and artistic centre, with a number of cultural and educational institutions and schools. In Rijeka and its surroundings, manufacturing industries, traffic and various services are concentrated, while tourism, farming, forestry and fishing represent chief occupations in its wider area. It is the main crossroad of the Adriatic tourist traffic, which flows from central Europe to the central and southern Adriatic. It is also an important traffic intersection, with roads connecting the city with the hinterland through Gorski Kotar and an important railway junction. The airport “Rijeka” is located near Omisalj on the nearby island of Krk.

These are all strong reasons for investing in property in Rijeka. The real estate market in Rijeka is stable and the city economy is strong, which can ensure the market will remain strong in the future as well. Tourist image of the region and its potential for future development also makes a strong reason for investing in real estate in Rijeka.

Downtrend in the construction sector in Croatia started already in the final quarter of 2008 with lower demand for property on the Croatian real estate market.
In fact, the number of building permits increased just 11.1% in December 2008 compared to the year before, with 16.1% more construction projects registered by the Croatian Statistics Office. In comparison, the number of issued permits almost doubled at the start of year 2009, evident in the annual increase of 96.8%.
Still, it seems that lower demand on the real estate market will further decelerate the construction activities this year, which is the forecast of most analysts. Also, unfavorable financial conditions presented by many banks are expected to limit the sources of funding for new projects and lower state investments. Downtrend in the final quarter of last year already cut capital investments which left a negative impact on Croatia and its economic development.
What is expected now is for the crisis to come to a stop and then the market will get fired up again. Many analysts also believe the fact that the crisis is responsible for the current situation is a good enough reason to start investing in Croatia, especially in these times when all construction almost stopped completely. There is a very real possibility that any new property built, in particularly business real estate, will have no problem with finding a buyer in a year or two.

Real estate market in Croatia needs new offices and commercial buildings and every newly built building will probably find a buyer quickly.
Development of new business buildings has been halted due to strict bank policies regarding new loans. Specifically, this refers to terms which include a high input of owner’s capital of up to 40% and an obligation to find buyers or loan out up to 50% of office spaces in advance. These terms make things a bit difficult cause not many firms in Croatia are willing to agree to these demands. That is why there aren’t many new commercial properties in Croatia lately and it is a good enough reason to invest cause the market is stable and prices are good, which means there is a realistic chance for a good profit.
Alo, Croatia is soon going to enter the European Union and it will be a good opportunity for many foreign multinational companies to enter Croatia and establish their regional centers of business in the country.

The beauty of Croatia is becoming a favourite for holidaymakers. With its villages dotting the Adriatic coastline, forests and mountains within its interior, Croatia offers something special. Considering this, Croatia is becoming a rising star on real estate and tourism scenes. Croatia is one European destination that many investors are standing up and taking notice of. We highlight the reasons:

Government Stability

Although the government is a relatively new democracy, it has made incredible strides in a short time. With a strong programme backing involvement in European and global politics, Croatia is making a name for itself. Croatia is in the midst of a number of reform programmes to make the country more stable. The government’s stability and firm leadership are inspiring property investor confidence.

European Union Entry

The government has been working very hard to bring the country up to European Union standards. Ascension is anticipated sometime within the next few years. Croatia is a member of the UN, the World Trade Organization and a number of other organisations. Impending entry into the EU constitutes welcome and good news for investors.

Economy is strong

Croatia doesn’t have the biggest economy by any means, but it isn’t the most populated nation either and it is doing well. The country’s major industries include shipbuilding, chemicals, pharmaceuticals and tourism. This is very confidence inspiring for property investors who seek the comfort of an already established economic stability.

Croatia’s Natural Attraction

Much of the attraction of Croatia is in the fact that a wide expanse of the nation’s landscape remains untouched by development. This is appealing for tourists who want to get away from the concrete jungles. A Yale University survey completed ranked Croatia 12th in the world for preserved, unpolluted natural habitat. Croatia came in well above other European countries traditionally considered unspoilt such as Italy, Spain and Greece.

Diverse Geography

To say Croatia’s geography is diverse is an understatement. Within its 56,542 square km expanse you can find a little bit of something. Its geography boasts beach front property, rolling hills, mountains, plains, rocky outcroppings and more and includes more than 1,000 islands. The climate ranges from continental to Mediterranean. visit the beautiful Adriatic shores one week and then take in some incredible mountain vistas the next.

Growing Tourism Industry

With its incredible expanse of Adriatic Sea coastline, beautiful weather, unusual architecture and unspoilt landscapes, Croatia is very popular for tourists.

Accessibility and Infrastructure

As Croatia attracts the attention of investors, it is also enjoying a reworking of its infrastructure. Major infrastructure improvements designed to make travel within the country easier include a new highway between Zagreb and Split and a new roadway system for Dalmatia.

Low Cost of Living

The strong Venetian influences in Croatia are evident from the culture and food to the architecture. Although the Venetians only ruled for a short time in the Middle Ages, they left their mark. This styling blended with Eastern European flair is very attractive! The cost of living in Croatia may be high by Eastern European standards, but it is not for Westerners.

Opatija is one of the main tourist resorts on what is called the Opatija Riviera. It is a strip of 8 tourist resorts on the eastern coast of Istria – Opatija, Icici, Ika, Lovran, Medveja, Moscenicka Draga, Moscenice and Brsec.
Opatija is one of the grandest names of Croatian tourism, which started in 1844 when Hignio Scarpa built a big villa. Many royalty of the Austro-Hungarian Empire and Europe stayed in this resort, as did many famous celebrities.
Main tourist attractions in the area are old villages Icici and Ika, Lovran with its old town and hotels, Medveja and Moscenicka Draga with beautiful beaches, and the medieval towns Brsec and Moscenice settled on the nearby hills.
Lovran is a significant boutique destination on the Riviera, with a number of exclusive and renovated villas dating back to the times of the Austro-Hungarian monarchy. There are many beaches and a well known Orthopedic Clinic situated in Lovran. Moscenicka Draga is just 15 kilometers from Opatija and it has one of the most beautiful beaches on the Adriatic Sea. Also, situated just outside of Opatija is a well known nautical centre Icici and its ACI Marina with 300 sea berths and 40 land berths, and a wide range of nautical services.
If you are interested in knowing more about the Opatija Riviera and investing in real estate in the area, feel free to contact us at www.trasa-realestate.com. We will provide you with all the necessary professional and legal assistance and point you to the best investment opportunities in Opatija.