Croatia Presses Ahead for 2013 EU Entry - Invest Now?
Croatia's lengthy negotiations to join the EUwere finally concluded June 30 after just shy of 6 years (talks started October 3 2005). According to experts on the issue, this makes July 2013 a likely timeframe for Croatia to become the 28th member of the European Union. We all know that EU accession has a tendency to bring fantastic growth to property prices, so, with this now on the cards for Croatia should property investors one and all be booking flights to this Adriatic paradise?
Normally my answer to that question would be an almost unequivocal yes, but in the case of Croatia it is a yes with caveats.
What Makes Croatia Different?
Croatia has already had a day under the impeding-accession-sun. Everyone expected Croatia to achieve membership by 2008. As a result investors poured into the country thinking that this was their chance to make the gains seen by those who had invested in Estonia, Bulgaria and Ukraine as they headed for accession.
This caused prices to grow rapidly, and then the market suffered when Slovenia blocked Croatia's accession on the grounds that the agreement could be prejudicial to their dispute over borders. Its suffering was compounded by the international financial crisis.
Prices rise on EU accession because prices in the countries that are joining are usually much lower than the rest of the EU, and there is a natural balancing process of as people flow to and fro across the borders renting, buying and selling property. But Croatian prices are not that much lower than the rest of the EU because of the escalation already seen.
And it Still Might Not Join This Time
Even after Croatia signs the accession treaty, and if it is signed by all member states (including France and Austria), the Croatian government is putting it to a referendum. The Croatian people are a predominantly disillusioned bunch right now, and a lot of this is directed at Europe. However, most analysts agree that they are far more likely to vote yes than no.
What, So We Shouldn't Invest Then? To say that we shouldn't invest in Croatia would be foolhardy; in fact we can't even say that the opportunity is less significant than it was in 2007. Like most of Europe, Croatia property prices have crashed. The tourism sector didn't fare too well either, but things are picking up now. Global tourism is once again growing, the global population is growing and no one likes an overcrowded beach, even if it is on the Mediterranean coast. Thus more and more tourists are spreading out from the hotspots causing continually rising tourism in places like Croatia.
As I always say and especially now, property investments should be looked at on the strength of individual opportunities, not countries. If you can get in and buy a top quality villa on the Mediterranean Coast at a bargain basement price it will enjoy rising occupancy as the tourism market grows. Buying at a low price into a property with rising yields makes it a near certainty that it will grow in capital value as well.
Article supplied by Liam Bailey on behalf of Novrealty, an overseas property agent with a difference; a company focussed on making buying property abroad as easy as it should be.