Investing in property in Croatia.

With EU accession around the corner and an ever-growing tourist industry Croatia offers plenty of opportunity for property investors.

Croatia is one of the most beautiful parts of Europe, with 6000km of Adriatic coastline, over 1000 islands, crystal clear waters, Mediterranean climate, and rich culture. The property market in Croatia is still in its infancy but is acknowledged by many experts as one of the best investment opportunities in Europe. When compared to other countries that have recently delivered high returns to investors, for example, Hungary and Poland,  Croatia really does have it all - and more:  a stunning coastline, great location (geographically close to more established European neighbours such as Italy), cheap living costs, great lifestyle, development of all year round tourism and record numbers of holidaymakers (up 7.5% last year), and an undervalued property market. All this, and EU membership is looming! When Hungary, Poland and Slovenia were approved for EU membership, property soared by as much as 40%.

That said, investing in property in Croatia is not risk adverse in part due to an unsettled and poorly managed economy (Croatia is on its 10^th government since independence). There is the emergence of two separate housing markets with a coastal property market buoyed by a big rise in tourism and a slower, weaker, inland property market. There are, however, positive signs for the country as a whole and, once Croatia's government and economy are on a more stable footing, the property market will take off.

Currently the most popular investment opportunities are in the coastal regions, although with the government working hard, investing in developing green tourism, some of the biggest returns and best opportunities can be found inland where it is currently a buyer's market and the advice would be, " bargain hard to get the best price".

The coastal areas are very popular with tourists and property buyers and property is priced accordingly. Property in the Istria is increasing in price due to its proximity and travel links to the rest of Europe and offers less value for money than a few years ago. Likewise, property in Southern Dalmatia (the most popular tourist destination) is becoming more expensive. Perhaps the best opportunities for investors are the areas of Kvarner and North Dalmatia which are becoming ever more popular with holidaymakers  and where they are investing in facilities accordingly. Kvarner is actually the most popular tourist destination in Croatia thanks to the thousands of Italians, Austrians, Germans and eastern Europeans who visit the region;  here the market is still undervalued compared to other coastal regions.

The Croatian government is currently developing the coastline with a number of new hotel developments, resorts, golf courses and facilities planned. The government has been careful not to ruin the coastline that attracts so many tourists each year and most development will be small resorts with restrictions on building too close to the coastline. With these new facilities come many investment opportunities, especially in the buy to let market.

With great travel links to the UK, growing tourism, great infrastructure, Mediterranean climate and accession to the EU expected by 2010, Croatia offers plenty of opportunities for healthy returns for property investors.

Bernard Aherne

Small World New Media Ltd

www.swnewmedia.com