Luxury real estate in Croatia doesn’t have the caché of its more famous Mediterranean neighbors. But this Balkan nation of 2.4 million boasts more than 1,200 miles of beautiful coastline on the Adriatic Sea and impressive beachfront villas, often selling for far less than ones sold in Greece, Spain and Italy. “It’s much cheaper and the coast is more beautiful than Italy or Spain,” says Michael Grimm, a real estate agent based in Croatia and a former partner at Engel and Volkers. “You can get a house on the beach or a sea view for $2,000 per square meter. In Italy it’s more like $10,000.” Croatia has more than 1,000 islands, second in Europe only to Greece, and stunning natural beauty that should make it a more popular luxury second-home destination. While residential property prices in Croatia have remained flat overall since the global recession, home prices in many of the most expensive and desirable coastal towns along the Adriatic Sea have been increasing.
MORE: The World’s Hottest Luxury Housing Market Is Auckland Cities like Dubrovnik and Split are among the most popular second-home luxury destinations as are the islands of Hvar and Brac. They’re both located in the Split/Dalmatia region along the southeastern coast. On the northeastern coast, the Isterian Peninsula town of Opatija remains a prime location for jetsetters. The hilltop village of Istria is sometimes referred to as the Croatian Tuscany. Home prices in Split increased 4.5% from $2,457 to $2,565 per square meter between April 2015 and April 2016 according to research on Njuškalo, one of the largest classified real-estate ad sites in Croatia. Homes in Dubrovnik were the most expensive, at $3,497 per square meter. The average price for a home on the Adriatic Coast was $2,070, up 15.6% in February 2016 from a year earlier. International buyers in the region are primarily Europeans from Slovenia, Germany, Italy, Austria and Scandinavia.
MORE: Why Ibiza Is a Good Place to Invest in a Second Home A seven-bedroom villa on the Ciovo Island in the Split Dalmatia region overlooking the Adriatic is currently selling for $2.8 million. The villa is atop a hillside and has amenities like a 115-foot boat garage and an 82-foot pantry. In Istria, a five-bedroom villa is selling for $3.9 million. It has a 493-foot sea view of the Kvaerner Gulf. There’s an indoor swimming pool, sauna, fitness studio as well as a duplex for guests and additional apartments for personnel. The garden is described as Japanese meets Mediterranean, and has a swimming pool finished with black marble from Zimbabwe. Croatia would like to emerge as a bigger player on the international luxury real estate scene. In April, government officials for the first time attended the Luxury Real Estate Fair in Beijing, hoping to lure some of the lucrative Chinese buyers that in the last two years have been heading to Mediterranean countries like Spain, Italy, Portugal and Cyprus. There are still multiple obstacles facing the Croatian market, according to experts. It’s only been 25 years since Croatia emerged from half a century of communism, and that was followed by a brutal civil war. Government bureaucracy and a glacially paced judicial system are also negative factors facing the market.
MORE: Portugal Has Become an Attractive Option for International Investors Jelena Cvjetkovic, an associate director at Savills, says that despite the luxurious villas that cities like Dubrovnik possess, they lack the “luxury infrastructure” such as premium boutiques and restaurants that attract the wealthy to spots in Spain and Portugal. After the financial crisis in 2008, many buyers began avoiding emerging markets like Croatia, she says. Another problem is low overall housing supply in Croatia, Cvjekovic says. Since 2008, residential construction has continued to fall. In 2015, home permits issued fell 10.24% to 6,950, according to the Croatian Bureau of Statistics. But there are positive signs for the future. With its entrance to the European Union in July 2013, home buying for other EU members became far easier. EU nationals are considered Croatian citizens for purposes of purchasing property. For buyers outside the EU, property purchases are dependent on reciprocity agreements that individual countries have with Croatia. Croatia continues to be an increasingly popular tourist destination; a factor that Cvjekovic says could lead to more interest in vacation homes. In 2015, the nation welcomed 14.2 million visitors, a record number. “There is long-term potential for uplift,” Cvjekovic says. “Croatia has a gentle pace, a Mediterranean lifestyle and a good quality of life.”
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