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Foreigners Revive Croatia's Property Market

Foreigners Revive Croatia's Property Market

Wednesday, 3 January, 2018 - 06:15
A three-bedroom apartment on the second floor of a traditional Dalmatian stone house built in 1928 in Trogir, Croatia, is on the market for about $2.1 million.Credit: Zoran Marinovic for The New York Times

This recently renovated apartment is on the second floor of a traditional Dalmatian stone house built in 1928 in the historic center of the island city of Trogir, a Unesco World Heritage site.

The 2,120-square-foot apartment has three bedrooms, three bathrooms, a 408-square-foot private roof deck with a spa and a smaller terrace; the furniture, by Croatian designers like Prostoria, is included in the asking price.

The entry hallway has original arches and Italian tile floors. Beyond the bathroom to the right of the front door is a kitchen-and-dining area with French doors that open to a terrace. The kitchen has crushed-stone countertops and Bosch and Sage appliances, as well as a traditional sink made from a single piece of stone by the owner’s grandfather, said Marko Pazanin, executive director of Croatia Sotheby’s International Realty, which has the listing.

Beyond the kitchen are a living room and a den, each of which has parquet floors of Slavonian oak and a 42-inch flat-screen television. Along the left side of the main hallway are three bedrooms with parquet floors, king-size beds and televisions. The master bedroom has a walk-in closet and an en-suite bathroom.

The apartment is in a residential building with two other apartments and a restaurant on the ground floor, in the city of Trogir, which has a little more than 13,000 residents and is near Split, the second-largest city in Croatia after Zagreb. Public parking is nearby, along with a grocery store and green market. The nearest beach is less than a mile away, in Okrug Gornji. Split is about a 40-minute drive, and an international airport is about 10 minutes away.


The global recession of 2008 hit the Croatian property market hard, with prices falling between 25 and 50 percent, brokers said, but in the past few years it has begun to recover.

While Dubrovnik continues to be the pearl of the Adriatic, the coastal areas of Split and Istria have seen moderate price growth, said Marko Ljutic, research and marketing manager of the real estate brokerage Dream Estates Croatia.

In Split, prices in the city center have gone up 20 to 30 percent in the last three years, said Tim Coulson, owner and director of the real estate brokerage First Property Croatia. “The town is unrecognizable from, say, four to five years ago,” he said.

Renovated homes in the old town center — one of the areas most favored by foreign buyers — sell for 3,500 to 5,000 euros a square meter (or about $380 to $545 a square foot), Mr. Coulson said, while unrenovated ones go for 2,500 to 3,500 euros a square meter (or about $270 to $380 a square foot).


Most foreign buyers are from Western European countries, particularly those within driving distance, Mr. Ljutic said, adding that he also has clients from England, Ireland and Slovenia, as well as Bosnia.

Other brokers said they are seeing buyers from Germany, Austria, Italy, the Czech Republic, Slovakia, the Netherlands and the Scandinavian countries, as well as Ukraine, South Africa, China and Russia, although visa difficulties have made it more problematic for Russian buyers since Croatia joined the European Union in 2013.

And “though more limited in comparison to Europe, interest from North American buyers is on the rise, particularly those whose roots go back to Croatia,” said Jelena Cvjetkovic, an associate director at Savills International.

In the past, most foreign buyers were looking for second homes, but now they are primarily investors seeking properties to rent to tourists, said Peter Ellis, the owner of Croatia Property Services.

“Foreigners are increasingly recognizing Croatia as a sound investment with a decent yield, and a wonderful place to spend some time with family,” Mr. Ljutic said.


A reciprocity rule allows foreigners to buy property in Croatia without restrictions if their home country doesn’t restrict Croatian buyers.

That means European Union residents can easily buy a home in Croatia, but United States citizens may or may not have reciprocity, depending on their state of residence, brokers said. (More than half the states in the United States have reciprocity agreements with Croatia, including New York, New Jersey and Connecticut, according to the Croatian government website.)

Buyers from places without reciprocity are required to set up a Croatian ownership company that generates income, Mr. Coulson said.

Brokers recommended hiring a lawyer in Croatia, which usually costs about 1 percent of a home’s purchase price. A title search may be done by the real estate agent, but buyers should also request that the notary do a search on the day of the contract signing, Mr. Ellis said, adding: “It’s worthwhile asking the lawyer whether there are any reasons, like local planning consent, that might impinge upon the value of the property.”

Closing costs are roughly 8 percent of a home’s purchase price, and include transfer tax, agency fees, legal fees and notary costs, brokers said. While some Croatian banks do offer mortgages to foreigners, the terms are not advantageous and most buyers instead use funds from abroad, Mr. Ljutic said.


Croatian; kuna (1 kuna = $0.16)


Annual property taxes on this home, if used as a residence, would be about $500, Mr. Pazanin said.

The New York Times

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