Croatia, which for many years has been one of the most popular destinations for Russian tourists, joined the European Union in July 2013. The introduction of visa regime has inevitably led to reduction in the flow of tourists from our country. Director of the agency Alma Dom Croatia Almasa Valevats told ee24.com portal how joining the European Union can influence the real estate market in Croatia, as well as where one can find the best and most affordable accommodation in this cozy Balkan country on the Adriatic coast.
- How joining the European Union will influence the real estate market in Croatia? Are there any visible changes now? What forecasts for the future can you give?
- Joining the European Union will not affect the real estate market significantly. Yet we don’t see any major changes in the real estate market. I believe it is due to overall European recession. As for the future forecasts, I think, buying property in Croatia will be considered a promising alternative by potential investors because even now we are receiving requests from potential investors for whom our country became more attractive due to the European Union joining.
- Will joining the EU affect Russian interests in Croatian real estate? Will the visa factor contribute to reduction of interest?
- The EU membership will not affect Russian interests in Croatian real estate. The matter is that Russian citizens still have to register a company in order to buy real estate. In addition, the introduction of visa factor significantly reduced the flow of Russian tourists in Croatia.
- What kind of real estate Russian citizens normally tend to purchase?
- Clients from Russia most often purchase apartments and houses near the Adriatic Sea, possibly with a water view. As a rule, the Russians are interested in apartments, which cost up to €100 million, and houses worth up to €350,000.
- What is the Croatian population’s attitude towards foreigners, namely, Russian tourists?
- I’ve got to say about Istrian peninsula. There is no negative attitude towards the representatives of Russia. The locals are sympathetic to Russian people, probably, due to the proximity of Slavic languages, and similarity of thinking.
- What are the most popular places in Croatia with foreign investors? How do they attract them?
- The most attractive place for foreign investors is peninsula of Istria. This is the coast of Istria, and resort towns like Fazana, Umag, Medulin, and the central Istria.
- Where is the most expensive property in Croatia?
- In Dubrovnik. The real estate prices are also pretty high in Opatija. Here the cost of a square meter can go up to €7000. The most expensive areas of Istria in terms of real estate are Rovinj and Umag
- What regions does your company work with? What lots are worth attention?
- Our company is engaged in the sale of lots throughout Croatia but the most of our lots for sale are placed on Istrian peninsula. It is worth paying attention to the options that are not so close to the sea but still within walking distance from the sea in a 15-20 minute walk, ie 1 km from the sea. Such lots typically cost from €75,000 to €80,000.
- What are the advantages for investors in the regions of your coverage?
- Speaking about advantages I can name favorable geographical location, proximity to Europe, namely proximity to Slovenia and Italy, very soft and comfortable climate. It is not as hot there as, for example, in Dalmatia. I can also mention beautiful nature, plenty of greenery and pine forests. Istria is ideal for holidays with small children.
- What is the minimum amount of money one can expect to pay for a decent house or apartment in Croatia?
- The price of a decent apartment in Croatia depends on the region. Thus, a secondary market apartment in Medulin (10 km from Pula) will cost you €80,000 - €90,000. Prices for decent houses start at the mark of €250,000 - €300,000.
- Is there any purchase of property for subsequent rent? Where is it most profitably to implement such a plan?
- Yes, very often clients who have purchased property receive a rent certificate for it. The most popular property to rent is in the suburbs of Pula (Medulin, Fažana, Premantura), as well as in tourist cities such as Rovinj, Porec, Umag.
- What about the mortgage? Is it difficult for a foreigner to get a loan in Croatian banks?
- Until recently, Russian citizens could not get a loan for real estate purchase in Croatia. But now it is possible in one of Croatian banks. Terms of lending and the loan itself are negotiated individually.
- How long does it take to make a deal for real estate purchase in Croatia?
- Normally, it is one-two months from selecting the item to the purchase of real estate. It all depends on how quickly the client can pay the whole amount of money for the property he or she is interested in.
- What are the accompanying costs when buying property?
- First of all you have to pay about €4000 for company opening. Tax on the purchase of real estate is 5% of the cost. Agency commission is 3% plus VAT (fee is not included in the price.) This are all the primary costs.
- What is the average cost of maintaining the property in Croatia?
- It all depends on the season: summer or winter. If you stay there the whole year the monthly utility costs amount to 1000 kuna (€150) for gas, the same for electricity (air conditioning, etc.), water supply is 150 kuna (€20). Garbage collection is paid every three months and amounts to €50. Phone, Internet is €50 per month. If you do not live in the house the payment is lump-sum. All payments depend on how much you spend. Also, to maintain the villa you need to hire someone who will water the garden and watch over the property. Such services are €150 per month.
- What is the situation with the residence permit obtaining in Croatia?
- First of all, to get a residence permit you must have a working or business visa. To do so you have to start any business in Croatia and the company shouldn’t be dormant, it should actually operate. It may be a small-scale trading, a cafe or restaurant ownership, etc. Based on the active business director of the company is issued a working or business visa and, automatically, a residence permit (children under 18 get all this automatically.) The permit is renewed every year. Accountant of the firm submits accounting reports to the tax service, which prove that the company is active. After 5 years the permanents residence is issued and then one can apply for citizenship.
Text: Ivan Ulitin, ee24.com