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(E) Croatian Islands Beckon as Property Market Blooms
By Nenad N. Bach | Published  09/13/2003 | Business | Unrated
(E) Croatian Islands Beckon as Property Market Blooms


Croatian Islands Beckon as Property Market Blooms

1 hour, 5 minutes ago

By Zoran Radosavljevic

MURTER ISLAND, Croatia (Reuters) - Now that he is retired, Jadranko Markov spends the days sipping beer at a seaside cafe, thinking how his family's islands might soon earn him a fortune.

Like many other residents of the Croatian island of Murter, Markov, a 63-year-old former lawmaker, owns two islets in the spectacular Kornati archipelago, a state-run national park of 125 privately owned islands.

"Those islands have belonged to my family for generations and I have just re-registered them in my name. Whoever wants to buy them -- two million euros apiece ($2.2 million dollars) and the deal is done," Markov told Reuters.

While trade in old Adriatic houses and villas is on the rise, the sale of whole islands to outsiders was never a serious option. But local officials say times have changed and the first commercial transactions may be close at hand.

Croatia's tourist industry is recovering after a decade of slump caused by the 1991-1995 war that followed independence from communist Yugoslavia. However, the actual property trade is still far from large.

According to data provided by the Foreign Ministry, where non-Croatians must titles to property, around 1,000 houses or building sites were sold to foreigners in the last two years. At least as many were sold to Croatians acting on their behalf.

With tourism back in full swing, under the slogan of "The Mediterranean as it once was," German and British newspapers and television channels are advertising Croatia's beauty, political stability and available real estate.

"Our standards are rising, infrastructure is improving, Croatia is moving toward the European Union (news - web sites), tourism is coming back. Interest in our property, as well as prices, is constantly rising," said Niksa Kljenak of Globus real estate agency.

As an indication of interest, Ivica Vulic of Broker estate agents, based in the central Adriatic city of Split, said his Web site was getting 5,000 visits a day, while he receives up to 100 direct queries, mostly from foreigners.

"Foreigners are attracted by unspoiled nature and a clean sea, the fact that our food is healthy -- given our outdated farming techniques -- and tap water is still drinkable," he said.


Under current laws, foreigners, including most European Union and U.S. citizens, can freely buy property in Croatia on the basis of reciprocity between respective countries.

One item going like hot cakes is the old stone house, a trademark of the Adriatic.

"There is huge appetite among foreigners for traditional Dalmatian stone houses on the mainland or in the islands, but there are fewer and fewer of them on the market and the best houses are already gone," said Kljenak.

He said most sales were in the 50,000 to 250,000 euro ($54,090 to 270,400) range, which could buy anything from a building site or an unfinished one-story house to villas with several apartments.

Princess Caroline of Monaco, Formula One auto racing boss Bernie Ecclestone, Britain's Prince Charles and Microsoft head Bill Gates and other jet setters often sail in the Adriatic in the summer. David Bowie and the Sultan of Oman also visited this year. But no big name has bought any property yet.

"There is no serious urban planning, no clear laws on what can be built where. That is not conducive to serious investment and the government has to change it," said Vulic.


A problem with the sale of islands is that the beach or coastline is public property and must be leased separately from the government.

No islands have been sold yet, but Vulic said he was "in advanced talks on the sale of several islands, the first ever."

The Kornati, scattered in the crystal-clear waters of the central Adriatic, are increasingly popular with yachtsmen seeking to drop anchor at sites with nothing but pristine nature anywhere near. Soon they may be a target for property seekers.

"The sale of islands is inevitable as demand grows, and the least we can do is lay down the rules for all, owners, buyers, government, national park management," said Ante Markov, member of parliament and of the ruling coalition, in power since 2000.

So will Croatia preserve the old ways or become the next Tuscany or Cote d'Azur?

"We don't know, but what we do know is that we don't want the 'Spanish scenario', where foreigners bought everything and now it's all artificial and mass tourism," said Markov. "There have to be clear rules on what and how much can be sold."

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