As we are still evaluating the direct and indirect effects of the coronavirus outbreak on the global economy, there has been increasing speculation over the future of the tourism sector in general since it has suffered a huge setback from this crisis and all the challenges it inevitably brings.
Considering that the Croatian economy is extremely dependent on tourism, which directly generates a significant share of the country’s GDP, it is not surprising that investors and rental property owners found themselves in an unenviable situation overnight, facing numerous inquiries from concerned guests who wanted to cancel their reservations or inquired about the current epidemiological situation in the country, as well as the procedures that would be implemented at border crossings. A fierce battle for each and every reservation ensued since the confirmed reservations could have been canceled at any moment due to the introduction of quarantine in certain emitting markets, or the recommendation to postpone travel until further notice, but also due to a number of new rules introduced on a weekly basis.
Exposed to a large amount of often contradictory information, and the recommendation of global booking platforms counseling implementation of high-risk cancellation policy without any penalties for last-minute cancellations, vacation rental owners and travel agents had very modest expectations for the so-called ‘new normal’ tourist season in unprecedented circumstances.
Given that the epidemiological situation in the country has been stable, and that the spread of the virus has been kept under control, Croatia has been recognized as a safe destination, and despite skeptical announcements and cautious forecasts of expected numbers and results, there has been an increased interest in luxury holiday villas.
Tourists’ expectations and demands
What conclusions can be drawn about the profile of travelers who were not discouraged by the Covid-19 and who decided to take their seaside vacation nonetheless?
First of all, it is clear that new time brings new expectations and standards that property owners must successfully meet in order to gain the trust of customers and provide them with absolute security that they can spend their vacation carefree regardless of the challenging circumstances we are currently facing. According to the latest inquiries and trends, most clients seek to book luxury villas in prestigious locations and oftentimes tend to book longer stays and additional services such as daily cleaning, grocery procurement, and a private chef who will take care of all meals during their stay. Such requests were more easily accommodated by the owners of prestigious villas who had previously been in contact with clients who want a little something extra for their vacation and by that, we don’t mean just modern amenities or a picturesque sea view.
A new era of travel – trends, and opportunities
Current trends again lead us to the conclusion that these extraordinary times have not by any means seen a downfall in demand for the most luxurious properties in exclusive locations. Moreover, the demand for facilities of this type seems to greatly exceed the supply, so customers are often compelled to change their plans and choose another destination that can meet their expectations. The largest number of confirmed reservations has been made by guests from neighboring countries who, thanks to the favorable geopolitical position of Croatia and excellent infrastructure, traditionally arrive on vacation by cars, and due to shorter trips prefer to choose holidays in the northern parts of the Adriatic and Istria.
It is very difficult to predict future developments in the global market and the dynamic world of the travel industry, but we are certainly at the dawn of a new era of travel that will be defined by adaptation to a new lifestyle promoting strong awareness of values such as health safety, environmental protection, and socially responsible behavior.
With growing awareness of the effects of mass tourism, clients are nowadays looking for more ecologically sustainable destinations and accommodating facilities, therefore we are presented with a unique opportunity to position Croatia as a destination that can meet new challenges and readily accept new conditions that might potentially result in a more responsible and innovative offer tailored to the current market needs.
After the measures are relaxed and the borders are opened, we are again able to organize a tour of the real estate for our clients, of course respecting the minimum security measures. In the past period, not only have we all been eagerly waiting for it to pass, but international clients have also been eager to come to Croatia and continue their search for their dream real estate.
The foundation of our business is nurturing customer relationships and investing in those processes. We have built their trust over the years, always keeping in mind a relationship that will one day, to our mutual satisfaction, be much more than just business. All this will become even more pronounced in the coming period.
A high level of professionalism, correctness, trust, and work ethic will be crucial factors in sales. Why? Primarily due to the offline offer.
Customer relationships are the key
Agents are the ones who will be the critical factor. Buyers ’trust in their agent is endless, as is the seller’s. Agents have all the information in addition to the privileged ones, such as offline real estate offer, real estate for sale on preferential terms – which is not available to the general public … If the owner wants to sell the real estate under confidential conditions, which only he and the agent know, trust is an extremely important factor.
Likewise, the buyer is the one who is willing to wait and patiently search for the property. He believes that the agent he has chosen will share with him information about the property from the offline offer, which for him is an exceptional business investment or an opportunity to buy a property ideal for enjoying and relaxing in a dream location.
Croatia Sotheby’s International Realty has access to unique international clients, we have proven to be a highly professional agency that can be relied on with full confidence, we have successfully cooperated with world-renowned athletes, businessmen, but also ordinary people who absolutely do not want their relatives, friends, and neighbors know they have sold a property that has been kept for generations.
All of the above are the values that guide us in business and the benefits we have invested in for many years. We continue to develop and grow and we want to let all current and future clients know that we are there for them and that they can rely on us with full confidence. Customer relationships are and shall remain a priority to us!
The changes caused by the current pandemic of the new coronavirus have not only affected our daily lives. The effects have been felt by numerous markets and economies, including the real estate market in Croatia and the world. Croatia Sotheby’s International Realty Director Marko Pažanin takes a look at the current state of the luxury real estate market in Croatia, as well as expectations of real estate sales in the near future.
These days I have had some really interesting conversations with my colleagues about selling luxury villas by the sea. For a large number of investors, the main motive for the construction of such facilities was the tourist rental, and only then the sale.
The popularity of the Croatian coast, both among foreign and domestic guests, has enabled a real boom in tourism in Croatia, which records year after year records in the number of visitors, and thus the amount of revenue generated. The rise in average prices of tourist rent on the Adriatic and the development of cultural, entertainment and sports offerings have brought excellent income to owners of luxury properties during the season and even beyond!
We could also feel the impact of tourist growth on the purchase and sale of luxury real estate.
So far, we have frequently encountered a price formed by sellers that could not be accepted by potential buyers as being realistic. Therefore, the sale of these properties often failed to take place. The owners, more than satisfied with the income they earned through the tourist lease, were not ready to lower the sale price of their villas and apartments.
Luxury real estate in unique locations is a safe investment for foreign investors
This year, we expect much lower tourist rental revenue in the season than in previous years, which will have an effect on adjusting the sales prices set by property owners.
I may be wrong and that may not be the case, but it is certainly the most likely scenario given the logic of business, supply, and demand.
In this uncertain situation, there is another scenario involving the most important rule when investing in real estate, which is “Location, location, location!”. This scenario benefits all owners of properties in unique and exclusive locations.
If you have high-end real estate in a unique location it will not be compromised in a market context.
The drop in prices will be felt the least in the top locations, of course, if the starting price was based on the estimation of a specialist who had the experience to sell this type of real estate.
Foreign buyers are still interested in ultra-luxury real estate
In contact with the clients for whom I seek so-called “trophy real estate”, almost everyone has confirmed their interest in them, even in these conditions. This is a great indicator that investments in luxury real estate will not stop, and that exceptional real estate will always have its buyers, which will not hinder global change.
World-class luxury exists in Croatia, but in limited quantities. Personally, I can hardly wait to have real estate on offer again, such as the famous Villa Castello, as buyers of such properties are ready to make a purchase regardless of the new situation, in which unfortunately the fall in prices for most properties is unavoidable.
In a quest to create a living environment that exudes peace and tranquility that only nature can bring, the biophilic design will become even more popular in the years to come. Devotees of nature, ecology, and sustainability in the design and decoration of interiors and exteriors, buildings, homes, and offices are looking for solutions that will bring us closer to our innate love and need for nature. In collaboration with Sensa magazine, we bring to you a more detailed insight into this major living trend.
Bring nature into our homes
There is growing scientific evidence that supports the fact that distancing ourselves from nature adversely affects our health and well-being. Many experts believe that behind the stress we accumulate lies the lack of adaptation to life in urban areas. That is – the deficit of nature. Natural greenery relieves stress, depression, anger, frustration, improves mood and physical health, concentration, productivity, creativity…
Nature can also help us transform our living space. This is evidenced by biophilia – a term coined by psychologist Erich Fromm and later, in the 1980s, popularized by Edward O. Wilson, an evolutionary biologist at Harvard. Biophilia represents a genuine human need for connectivity and harmony with nature.
Biophilic design is becoming more and more appealing to designers and architects eager to create a space that is custom made for a more human way of living. This type of design and decor includes, among other things, buildings that resemble shells, homes that rotate in daylight, apartments whose balconies resemble small, green jungles, and homes that encourage residents to grow food and even produce themselves foods such as honey. It is obvious that this type of architecture of the future grew out of the roots of our past.
„The biophilic home should, above all, be an oasis and a refuge for the modern person after a busy and stressful day,” defines Nataša Komljenović, an architect and expert in biophilic design from Novi Sad (Serbia), adding that this design is characterized by the urge to reconnect with nature, natural elements and its rhythms.
7 tips on biophilic design
Amanda Sturgeon, the author of the book Creating Biophilic Buildings, brings the principles of biophilic design into our homes.
Windows to the world
The home should bring an abundance of fresh air and daylight through numerous windows, skylights, and doors to connect with the outdoors. Through the open windows, we can also hear sounds from nature – rain, wind, birds singing. It connects us with the seasons and the weather.
Interaction of light and shadows
We are healthier when our biorhythm is in balance and when daylight is available to support it. By watching the shadows around the room we intuitively know what time it is and we instinctively gather in places where there is more sunlight.
Between interior and exterior
In almost every climate, outdoor spaces can be used as a functional study room or living room for at least a few months a year. Spending more time outdoors will make you feel more in tune with nature.
Too often our living spaces are sterile, with no sign of wilderness. Include as many natural materials as possible in your home, such as wood, stone, wool, bamboo – materials that are not processed. Different textures and patterns will encourage the variety of sensory experiences we usually experience in nature.
All forms of nature
Today, architecture is mostly dominated by straight lines and right angles. Since every home cannot be inspired by forms from nature, we can use many motifs and shapes from nature as decorative details that will make us feel closer to the location or area in which we live, using authentic plants, branches, shells, fountains…
The spirit of the location
Due to the global economy and the availability of diverse materials and products from all around the world, our homes have lost their sense of belonging – they do not reflect our climate and culture. Whether you live near the sea or near the forest, try to understand the character of the location and use it as a décor guide.
Nature is not monotonous, it is spacious – from meadows and dense forests to mountain peaks. By mimicking the nature of the home, try to create a variety of micro spaces that will suit a specific purpose or mood. Create a room that is quiet in some corners and “alive” in others by using vibrant and neutral colors for visual partitions. That way you can mimic the experience of being outdoors.
Author: Magda Dežđek/Sensa Magazine
Sensa is a Croatian wellbeing monthly magazine covering topics about personal growth, healthy and sustainable lifestyle, and life/work balance.
“New Year – New Trends” is a very true saying, especially at the beginning of not only the new year but also the new decade. What will inspire interior designers in 2020? What real estate decisions in Croatia should you make to keep up with the latest trends? Let’s look at current trends in the real estate world!
As for the trends for 2020, they are evident at the beginning of the year. Designers seek less anxiety and stress and more design that matches health, well-being, sustainability, and a sense of calm.
Combine this basic postulate with Mediterranean culture, and you can already see how this will be a great year (and a decade) for Croatian real estate. Here are our guidelines for making trendy choices when buying a property in Croatia in 2020
Connecting with nature
The introduction of natural elements into our homes is a major trend in 2020. People want to reconnect and find a balance with the environment, even within their homes. These aspirations are mostly represented by trends in the choice of colors (green, blue, and earth tones), materials (natural wood, stone, jute), organic forms, indoor plants, indoor gardens and micro-greens, and even indoor water elements (e.g., mini fountains). ). Be sure to combine these details with warm metals such as gold and brass for that ultimate luxury stamp.
Not to be misled, this does not mean that the indoor greenery will replace the outside. Spacious gardens overlooking the Mediterranean Sea or the forest, remain very popular in 2020.
Therefore, when choosing a property in Croatia, think of greenery – indoor and outdoor.
Following our changing and accelerating lifestyles, we want our homes to be multi-functional in 2020. “Home” has ceased to be an exclusive place to live, and has become a place for all kinds of activities, from living to working, exercising, entertaining…
Bellaria EstateSingle-use spaces are slowly becoming dated as our demands for functionality grow year by year. Spaces that were usually located outside our homes, such as a gym or office, are increasingly located inside our homes. Also, spaces that can be easily adapted for various purposes, such as a lounge that can easily be converted into an entertainment space, are in high demand in 2020.
Sustainability is written with a capital “S” in interior design trends in 2020. As global concerns for our planet’s ecological future grow, they are increasingly evident in real estate in Croatia. More and more homes, especially luxury homes in Croatia, come equipped with their own solar panels. Simultaneously, plastics become a major “no-no” when choosing materials to incorporate into the design.
We want our homes to not only look green but to be truly green: energy efficient and self-sustaining.
Bright colors and striking details
In addition to the balanced, harmonious interior, dominated by natural materials and colors, designers advise adding some striking details. Colorful silks and patterns from India, China, and Japan, handmade wooden furniture, large sculptures, hand-painted tiles, brass lamps, fine woven rugs – these are just some of the ideas you can incorporate into your design. The best part about these details is that they are easily added to any home, so they do not have to be there when buying a property. Imagine these details and where to place them, and then apply your vision to purchased real estate in Croatia.
So, choose a place that suits your needs, surround yourself with a multitude of natural elements, add a few details of your own, and enjoy 2020 in your Croatian dream home!
Lush greenery, open spaces, blue sky, amazing design, and lots of privacy – is there anyone who would not want this? Estate living offers it all and even more! Estate living in Croatia comes with numerous advantages, making this form of living very hard to resist. Great square footage on exclusive locations in Croatia enables you to live your days to the fullest, with an endless choice of hobbies you can dedicate yourself to, right there in the privacy of your own estate. Spoil yourself with comfort and luxury, as nobleman used to!
Estate living in Croatia
Set in an unspoiled natural environment in the small picturesque town of Klek, the 30.100 square meter Bellaria estate represents a true oasis of comfort with scenic sea and island view. Its top of the notch modern apartment is beautifully combined with a stunning, cascading vineyard.
Unique pebble beaches are just around the corner. Autochthonous plant species are present throughout the estate, perfectly framing the estate’s pool and barbeque area.
Located only an hour’s drive away from Dubrovnik, this estate offers the city’s proximity and all its perks, yet always enabling you to come back to enjoy the peace of your estate.
Those looking for more rustic real estate in Croatia will surely like the Ambient estate. Extending over 8.500 square meters, this gorgeous estate borders the UNESCO-protected Stari Grad Plain. Located between Stari grad and Vrbovska on Hvar’s sunny island, it offers utmost privacy and a unique Mediterranean ambiance you cannot resist.
The location also offers great proximity to the beach, while the closest town center is only two kilometers away! The total of four homes on this estate, a 28 – square meter heated swimming pool with a sunbathing area, a summer kitchen, and lots of other additional amenities make for a unique private oasis.
Yet, when it comes to privacy, there is an extraordinary place that must be mentioned. Right in the heart of the island of Vis, the Topiaria estate has found its place under the golden Mediterranean sun.
This 31.088 square meter estate boasts a spectacular view of the sea and the sunset. The estate is cultivated with a grapevine of high quality and 200 olive trees, surrounding the amazing stone villa with a swimming pool. Additionally, a smaller stone house and a wine cellar are also a part of this amazing estate in Croatia.
Going up north, Istria has a Jewell of its own. Surrounded by the picturesque countryside, the Fantasia estate is a true paradise for the romantic Istrian landscape’s nature lovers and admirers. Forty kilometers away from any larger city, Croatia’s estate offers full privacy and comfort to its residents.
Two main buildings and several additional smaller objects can be found on this estate, complemented by high-quality equipment, a heated swimming pool, and 700 types of trees brought from different parts, lavender fields, and a tennis court.
Last but certainly not least, feast your eyes on the Aroma estate. Located in the Istrian peninsula’s interior, this energy class “A” property consists of 10 hectares of owned land and more land in the concession. The farm is cultivated with plantations of gardens, vineyards (2,400 tbsp), olives, orchards, figs, plantations of medicinal herbs, and aromatic plants.
The estate possesses excellent infrastructure, a 5.000 m2 plateau planted with a young xeranthemum, and an amphitheater in three cascades. The amphitheater is engraved in the rocky hill’s natural stone and is enclosed in the form of hexagonal horseshoes in three buildings – an area of 1,000 m2.
When in the mood for visiting the city, only a 12 km drive will lead you to the charming town of Rovinj. The rest of the time, you can use it to enjoy the privacy and comfort of your own natural oasis.
When buying a property, often the foremost is the aesthetics or location of the property itself. However, the purchase of real estate is a legal process, so we must not neglect the legal side. What should you do, and how or when should you do it to make your purchase neat and easy as possible? All of this shall be explained through a series of blogs by our tax advisor Ivica Baban.
Foreign citizens who buy real estate in the Republic of Croatia are generally divided into two groups, depending on where they come from. Citizens living within the European Union make one group, while those living outside the EU make the other.
Why is this important?
While foreigners from the European Union may purchase real estate in the Republic of Croatia under the same conditions as nationals of the Republic of Croatia, those living outside the EU must obtain consent for the purchase of a real estate in the Republic of Croatia from the Ministry of Justice of the Republic in the administrative procedure. Without this consent, the new owner could not registrar his ownership of the land he purchased.
The only exception from this rule are agricultural land, for they are subject to a moratorium on their purchase by foreign nationals from the EU until June 2020.
There is an additional requirement concerning non-EU citizens. Only citizens coming from countries with which Croatia has reciprocity in acquiring the ownership rights of their nationals may go to administrative proceedings and seek the Ministry of Justice’s consent.
Consequently, other non-EU nationals coming from countries with which the Republic of Croatia does not have the principle of reciprocity in acquiring ownership of their citizens’ real estate may not, as natural persons, purchase real estate in Croatia.
Yet, there is another option for them. They may decide to set up a company (most often, it is a limited liability company or abbreviated d.o.o.) in Croatia. As owners of companies with headquarters in the Republic of Croatia, they may acquire ownership of the real estate.
It is necessary to know that the owner of the purchased property is then the company, not the owner of the company himself.
Don’t forget the taxes.
When buying a property in Croatia, in addition to the purchase costs, the buyer may be obliged to pay a real estate tax (PPN). The height of this tax can be defined in two ways. It is either 3% of the property’s purchase price or 3% of the estimated property value by the Croatian Tax Administration.
This will occur when the seller does not calculate value-added tax (VAT) for the property sold, as evidenced by the seller’s purchase contract or invoice issued.
Notaries are obliged to submit a copy of the purchase contract to the Republic of Croatia’s Tax Administration, which will send a decision on the obligation to pay real estate taxes.
In case that a notary does not certify the real estate transfer documents, the buyer is obliged to declare the obligation to pay real estate sales tax in Croatia within 30 days for those real estates that have not been subject to value-added tax on the sale.
Taxes apply to all – a foreign citizen from outside the EU who requires the Ministry of justice’s consent becomes taxable at the moment of obtaining that consent.
Croatia has still not stood out as a true luxury real estate market. Still, despite this, we have noticed a growth in foreign investors’ and buyers’ interest in Croatia’s luxurious properties. The demand for luxury real estate on our market has increased by 30% compared to 2017, and the number of real estate queries in Croatia Sotheby’s International Realty portfolio has increased by 30%. When it comes to top qualities our customers seek in a luxury property, location is ranked pretty high. Everybody wants the same thing – to rent or buy a luxury property on Croatia’s coast!
Rent a luxury property in Croatia for a truly memorable vacation
As a well-known tourist destination, Croatia offers a wide range of accommodation facilities. If renting a luxury villa in Croatia is what you seek, then Croatia Sotheby’s International Realty is your best partner in this search. Not so long ago, we have enriched our portfolio with luxury villas and apartments all over Croatia’s coast available for rent every week. A touch of luxury will make your vacation memories even more memorable, especially if you stay at a property that is just right for you. This is our mission – to pair up our customers with luxury real estate properties that suit them the best!
Make your Croatian, luxury real estate dream into reality.
On the other hand, you might fall in love with Croatia and wish to stay here for more than just a week or two. We’ll be right there to help you find just as perfect and suitable property as the country itself. To buy a luxury real estate property in Croatia, maybe your dream today, or become your dream in the future, but with our help, you will turn it into reality! With our expertise and guidance, the process will be smooth and easy, and at the end of it, you will be holding the keys to your dream Croatian home. To ensure we have the right property for you, we actively spread our portfolio with new luxury properties. New properties and new prices come with each day so make sure you check out our portfolio regularly. You never know when your perfect luxury real estate property in Croatia might appear!
The sun, the sea, beautiful weather, and Mediterranean lifestyle, combined with great properties in great locations, are the recipe for a successful business year when it comes to Croatia’s luxury real estate market. The numbers have gone up and are expected to continue growing throughout the following year.
Retrospective of the luxury real estate market in 2018
2018 has generally been kind to Croatia’s luxury real estate market since demands for this sort of property were up by 25 percent compared to 2017. At the same time, the prices of luxury real estate in Croatia rose by 10-15 percent. The average price for a villa ranges between 5000 to 6000 euros for a square meter.
Clients opting for these properties are mostly foreigners, coming primarily from Germany, Austria, the Czech Republic, Slovakia, England, and Scandinavian countries. Also, some inquiries came from Russia and China. The average age of property buyers varies between 45 and 60. Russians and Chinese want the property they buy to match the highest standards, while Europeans are more open to redecorating and reconstructing the property themselves.
Clients have their preferences regarding location, choosing mostly properties at the coastline between Primosten and Trogir (especially in Split) and around the town of Dubrovnik. Besides their beauty, these areas owe their popularity to the proximity of airports, motorways, and marinas. When it comes to the islands, the most popular ones in 2018 were Brac and Hvar.
Despite great results, the market has its issues. The most prominent ones are the somewhat closed banks towards supporting investors and the lack of offer suited for clients aiming at luxury properties.
Predictions for the luxury real estate market in 2019
Still, positive market trends are expected to continue in 2019, with expected price growth of up to 10 percent, followed by even greater demand for luxury real estate in Croatia. The start of construction of several tourist resorts with 5-star hotels is expected in 2019, along with some world-class hotel brands to the Croatian market, such as 4seasons and Marriott.