Housing loans for foreigners / mortgage for EU citizens



We waited before posting this information, and we needed to test the information given to us, but we can now announce that Erste Bank, one of Croatia's largest banks, with its holding listed at the Vienna stock exchange, is offering housing loans to EU citizens who wish to buy a property in Croatia.

The product 'Erste Housing Loan for foreigners', in short
  • interest rates: ca. 6,5 - 7 %
  • amount of loan possible: up to 100% of property price
  • repayment period: 20 years 
  • type of loan: annuity (fixed monthly payment, including a part re-payment and a part interest)

Download the full mortgage conditions here

Our findings and advice, in short
  • Current interest rates are still high in comparison to EU rates. As soon as Croatia enters the EU we expect that rates will lower as a result of direct competition from other foreign banks on the Croatian market. 
  • A 100% loan demands an deposit (on a blocked bank account) from the client. Effectively, it is wise to take a maximum loan of 70% of the property price, in such case there is no deposit demanded by the bank. 
  • attached calculation show that, when one chooses a loan of 50% of the purchase price, the costs of the mortgage are still less than the profit from renting out. This, particularly, makes your second home an interesting investment where the rental business pays for the costs.
  • Take into consideration that the domestic en international (second homes) markets are two different things in Croatia. The prices of coastal real estate are subject to international demand, rather than from domestic demand. The easier availability of mortgages for foreigner will have a positive effect on those house prices.


Mali Kosi Seaview Villa Project
For the Mali Kosi Seaview villa's we have calculated an example situation. A 3 bed room villa with full sea view can be purchased for EUR 263.000. Including all purchase costs, and making use of a housing loan from Erste Bank for 50% of the purchase price, an investment is needed of only EUR 150.000

own investment needed for purchasing a 3 bed room, sea view villa: EUR 150.000

annual rental income: EUR 23.000
annual costs (incl. mortgage costs+re-payment): EUR 20.500
annual profit: EUR 2.500

Download the complete loan offer for a Mali Kosi Seaview villa


Invest now in Croatia, right before the country enters into the EU (2013; set date for EU entry)!



Croatia tourism figures up in 2011

(AFP)
ZAGREB — Croatian tourism is on track for a record-breaking year, with an eight percent increase in visitors since January, the tourism minister said Wednesday.
"If we talk about numbers of visits and overnight stays, this is certainly the most successful year in Croatia's tourism," a key segment of the Adriatic country's recession-hit economy, Tourism Minister Damir Bajs told national TV.
During the January-July period 6.2 million tourists visited Croatia, ministry figures showed, an eight percent increase on the same period in 2010, or an extra 450,000 tourists.
In July alone, some three million tourists were recorded in Croatia, 4.8 percent more than the same month last year.
Tourists accounted for 19.8 million overnight stays, a 3-percent increase compared with the same period in 2010.
Last year 10.6 million tourists visited Croatia, mainly enjoying the Adriatic coast in July and August, while tourism-generated income stood at 6.24 billion euros ($8.9 billion).
The tourism industry makes up around 18 percent of the country's gross domestic product (GDP).
After a continuous rise in tourist numbers since the end of the 1991-1995 war, Croatia registered a fall of 2.5 percent in 2009 when the country fought a recession.
Despite improvements last year, it has since then only seen quarterly growth once -- 0.3 percent in the third quarter of 2010.
The former Yugoslav republic is set to join the European Union in mid-2013.

European elite delighted with Istria


Businessmen and noblemen from throughout Europe have discovered an untouched tourism haven in Istria and there are building or restoring luxurious villas for themselves and their guests
article by: Stanko Boric

Western Europeans, particularly Brits, Germans, Austrians, Italians and Scandinavians have discovered Istria, and are buying homes there for two to three times less than the cost in Tuscany or Provence – regions Istria has been compared to. Andreas von Bismarck, one of the heirs of Otto von Bismarck, first Chancellor of the united Germany bought and restored a house in Vizinada. Though we found Bismarck at the house, he declined to speak with us. The house of the “king of pudding and baking powder” Richard Oetker is in the village Prascari near Visnjan. Oetker spent more than two years restoring the house and, like other wealthy people, he has had the entire estate covered with alarms and security cameras to protect his privacy.
Scottish landowner, Lord Alexandar McEwan, has a true castle in Oprtalj, which he made from a classical Istrian house. When Lord McEwan is residing there, both the Scottish and Croatian flags are hung out, and while he is away the house is rented out from 1220 to 2870 euro per week, depending on the time of year. Twenty kilometres from the von Bismarck home is the home where Formula 1 star Ralf Schumacher vacations. The extra luxurious home is in the village of Kaligarici and can only be reached via a gravel road. It is not known whether this house is owned by Schumacher or a friend of his, however the race car driver frequently spends time here. In the very centre of Istria, in the village Pajci near Tinjan, Baron Friedrich Mayer-Meinhof from Salzburg has a large estate.
The most spectacular view though is reserved for Irish producer and president of the Motovun Film Festival Mike Downey. From the terrace of his home in Grimaldi, the view stretches out over Butoniga Lake and the surrounding areas. Like McEwan's, Downey's house is also available for rent, from 1000 to 2150 euro per week.
In addition to the wealthy who visit Istria during the summer, members of the middle class have decided to make Istria their home. Among them is a couple from Holland, Sande Jan Worst and Minke van Ingen, who moved to the village Valenti in central Istria six years ago. Their home can only be reached via a very steep and almost inaccessible gravel road. “When we showed relatives and friends photographs of the ruins of the house and estate we sold our home in Holland for, they said we were crazy. Now, they all visit us and want to stay as long as possible,” says Minke with a smile. Her husband Jan has found work in Croatia with a German investor. Minke says that they have excellent relations wit the locals, who were quick to lend a helping hand when they first arrived. They visit Holland twice a year, but feel no nostalgia for the life they left behind. “We do miss the cultural life a little, for there is no theatre, cinema or other entertainment here, but what is hardest for us is that there are no English newspapers available here.” However, they say that the peace that they've found is priceless.
Among those who've decided to buy property in Motovun are Sofie Aller Anderson and her boyfriend Carsten Fromberg, both from Denmark. Fromberg is a film and theatre director and was a professor at the Danish School of Film until 2003. “Carsten visited the Motovun Film Festival and lead workshops for many years. We both loved the town and, together with our friend Robin Engelhart, found this stone house and decided to buy it,” said Sofie, who we found in the midst of renovating the old house in the centre of Motovun. “There's a lot of work to do, but we wanted to renovate the house to our liking,” says Sofie, who added that she's delighted with Istria.
The average Istrian stone house in need of renovation has a living space of 111 m2 and an average price of 49,000 euro, meaning that a square meter of Istrian stone houses is worth an average of 442 euro/m2. Meanwhile, the price of already renovated stone houses is about 165 times more expensive. The renovated houses have an average living space of 158 m2 and an average price of 185,000 euro or exactly 1168 euro/m2. Andrija Colak, co-founder and general manager of the specialized property sales guide InfoNekretnina is very well acquainted with the property market there, and he says that the price of renovating a house depends on many factors and can range from 400 to 700 euro per square meter.
“About 60,000 euro needs to be invested into the average house with 111 m2, meaning that the purchase and renovation of the house requires about 110,000 euro. It is important to note that the adaptation of such a house requires the help of an architect and verification of the plans by the Croatian State Conservation Institute to ensure that the adaptation is in line with traditional construction. With respect to the adaptation of stone houses, more than 60% of the requests come from foreign citizens, mostly from the UK,” says Colak.
Interest in investing in old rural Istrian houses has been climbing for the past fifteen years and has jumped in the last five years, thanks mostly to good marketing by the local tourist board. Statistics say that the ratio of domestic to foreign buyers of land in the interior of Istria is 70:30 in favour of Croatian buyers, however the real reason for this is that a large number of foreigners buy property through Croatian citizens.
“Istria is seen as the new Tuscany, only with much lower prices and a large supply of available property. Istria is new in the world and people are just starting to discover it, which is much more interesting to foreigners than Spain or the less attractive Turkey. This has created great demand for property which, for the local population, was more or less worthless until recently. Then foreigners suddenly started offering prices that were unthinkable for that kind of property. Therefore, the reasons for this interest are primarily the geographical position of Istria, which lies in the very heart of Europe, the authentic property foreigners want to buy because they are unique in the world and the low cost of property,” says Colak.
Architect Dean Peteh claims that in the beginning, the Germans, Austrians and Italians showed the most interest in stone houses, while now the majority of investors are coming from Great Britain. “There are two kinds of buyers, those who know Istria and want it to become their second home and those who want to invest in Istria. There are more and more of the second type in Istria; the majority are English who spend about 15 days a year in Istria and rent out the property at 150 to 800 euro a day for the rest of the year. In this way, they get a quick return on their investment and gain ownership over property that is only going to grow in value,” says Peteh.
The average buyer of Istrian stone houses is a member of the middle upper class, an intellectual, lover of nature and gastronomy. Considering that Istria is still not as popular as Tuscany or Provence, there is still a large number of abandoned and free properties that are reasonable investments. “The biggest problem is that the majority of these properties do not have clean ownership papers, this is very difficult to find. For that reason, and due to the high criteria of the buyers, it is now more common for new stone houses to be built in the native Istrian style. Here there is a danger of the 'Tuscanization' of Istria, as investors want to achieve architecture that will be impressive to their friends and neighbours. Architects are the ones to model their desires into a form that will be in line with the history and architecture of Istria,” says Peteh.
Today, the majority are building stone villas, though there are more and more successful attempts to combine modern architecture with the architecture of this region. “It is not easy to build a rural urban in Istria, as the Istrian house is a poor house. Modern Istrian stone villas today have spacious rooms, pools, satellite antennas and air conditions, and it is very difficult to combine the image of an idyllic poor Istrian house with the need for a comfortable country life in a villa. Therefore, this form is yet to be evolved. We wouldn't want copies of villas from Spain, France or Italy to be built here, a new form a residential living in Istria needs to be formed,” says Peteh.

Authentic Dalmatian stone house-stylishly renovated and recently reduced to E140K

 scroll down to view some movies, filmed while walking through the house

  Region: Peljesac Peninsula
Town: Orebic
Location: Sea View
Size: 120sqm

click here to request more info on this property
or mail us to receive the full info package

Description:

Authentic Dalmatian stone house-stylishly renovated and priced to sell. The house was purchased in 2002 by a British couple and was completely rennovated.It was valued last year at over 200,0000 euros so represents excellent value. The price includes fixtures and fittings. Nestling at the base of Mount Ilija this traditional stone house is just 700 metres from the seafront at Orebic town. The house is 200 years old ,mountain spring water feeds the taps in the kitchen and the neighbours produce wine on the premises.

The ground floor features the hall the dining room and the bathroom and a kitchen.
On the first floor are 3 double bedrooms-one of which lets out onto a shady small garden area.
The top floor is the main lounge and balcony which runs the entire width of the house that has views of Korcula island. This room also has  a shower room and toilet.

Location:
The house is a quiet hamlet with just 4 houses so it is lovely to sit outside the actual house. Usually the owners set up their table here to eat here in the evenings.

There are lots of places to wander to from your own doorstep as well.
The 3-hour hike to the top of Mount Ilja starts from just outside  and provides stunning views of Korcula Island.
According to the Lonely Planet "Orebic has the best beaches in Southern Dalmatia - wide sandy coves bordered by groves of tamarisk and pine".

In the price is a large secure garage and drive way with room for 2 cars.
The price also includes a tennis court sized piece of land ,50 yards from the house-this could become a swimming pool or even a small vineyard.

Price: 140,000 €
view from the terrace

one of the 3 bed rooms


sea view from the largest terrace





The kitchen is a traditional Dalmatian design for a kitchen which means its the stand alone building opposite the front door. Last year a stairs was added to this building and railings and this created a lovely sun deck/terrace.




click here to request more info on this property
or mail us to receive the full info package

Croatia Presses Ahead for 2013 EU Entry - Invest Now?

Croatia's lengthy negotiations to join the EU were 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.



Villa nestled in the hills with view to Oprtalj







Nowhere is the former Italian influence so obvious as in 'Portole' (now: Oprtalj). This villa is located on the hill just across. The owner has not yet offered this house to any other agent, giving you, as our client, a unique opportunity to purchase one of Istria's most beatifull villa's. The garden in front of the house disappears in the hills' horizon, leaving an unblocked, majestic view to the 'Tuscan' town of Oprtalj.


The price is very low for what is offered: The villa is accessed from the gate, and a driveway leading to the garage + tool room. Next to the garage is the large living-kitchen. A corridor leads to the down stairs study, that can also be used as TV-room or guest room. There is a bath room with toilet on the other end of the corridor. An outdoors patio with very large massive wooden dining table offers outdoors dining in the shade with that immense view over the valley and Oprtalj. Upstairs are two more bed rooms and a second bath room. A terrace and small fountain in front of the house flow over into a meticilously maintained lawn that stretches all the way to the edge of the hill. Build with the highest of material standards, includes an alarm system. Nearest neighbour: 120 mtr away down the hill. Distance to the sea: 18 km.

Asking: EUR 230.000, we advice an offer of EUR 200.000

unfortunately these pictures were made with no clear sky conditions. However we wanted to just photograph the house and send it out to our clients as quick as possible. Once you are here, and standing in the garden, you will understand the true value of this house.

Call us to arrange a viewing: +385(0)21770701
see more contact details here


driveway that ends at the villa

from the back of the villa, towards Oprtalj

from the garden with the fruit trees, towards the house

from the back of the villa to Oprtalj


the garden on the richt of the house, with left: the patio


Oprtalj

Novigrad, the nearest seaside city: with its historic and new part an ideal destination for shopping

photo taken from the road to Oprtalj, in the middle-right is the villa

Novigrad

a villa nearby Oprtalj: this area is received as the Tuscany of  Croatia, with splendid rental villa's that make this region a world-class destination

Porec, one of Istria's largest cities

view from Oprtalj to the surrounding hills