Demand for homes in Croatia tipped to rise

Thursday 26th January 2012

With EU membership fast approaching, a senior member of Croatia-based property development firm iO Adria expects to see more foreigners buying homes in Croatia in 2012 in anticipation of solid investment returns.

Croatia signed an EU accession treaty last year and should join in July 2013, once all 27 existing members of the union have ratified the deal.

It would come more than 20 years after Croatia broke away from Yugoslavia, which triggered a 1991-95 war to secure its independence.

iO Adria, which owns Dubrovnik Sun Gardens, has had a successful start to the new year with six sales at the high-end development confirmed, and three more deals in the process of completion.

Julian Houchin, commercial director of iO Adria, says that demand for homes in Croatia is already growing and expects pending EU entry to help generate greater returns from property investments. He thinks that the popular holiday hotspot of Dubrovnik will prove particularly popular with international homebuyers.

“[Dubrovnik] one of the most beautiful and fastest growing tourism and second home real estate destinations in Europe where early buyers can also benefit from entry level pricing and mortgage financing at Dubrovnik Sun Gardens,” he said.

A one bedroom residence at Dubrovnik Sun Gardens starts at €170,000 (£143,000) for a ground floor property with garden view, up to €336,000 (£281,800) for sea view. Two bedroom residences range from €308,000 (£258,290) up to €608,000 (£509,920).

Houchin added: “This [Dubrovnik Sun Gardens] is one of the few lifestyle freehold real estate resort investments available today in Europe offering a balance of personal usage and competitive net yields for owners through a sophisticated rental programme now in its third year of operation.”

Anyone contemplating the idea of buying into this unique five-star beachfront resort, may be interested to learn that mortgages of up to 60% loan-to-value are available with Erste Bank on a 15-year term at fixed 6.6% interest rate.

Houchin projects that anyone letting out their property at Dubrovnik Sun Gardens could expect to achieve a peak season occupancy rates of 95%, illustrating strong demand for holiday rental properties in Croatia, with a gross annual rental return of about 4% achievable.