Source: http://www.nytimes.com/2014/03/06/great ... .html?_r=0
Housing Hunting in ... Croatia
A SIX-BEDROOM VILLA ON KOBAS BAY IN CROATIA
$2.5 MILLION (€1.8 MILLION)
This four-story hillside villa with six bedrooms and a ground-floor studio apartment has its own quay on secluded Kobas Bay off the Peljesac Peninsula in Croatia. Built around 1990 and renovated in 2008, it has concrete construction, a stone facade and a terra-cotta-tile roof.
The house has a four-story external staircase and an internal staircase from the second floor to the third. The living room, kitchen and powder room are on the second floor, as well as a bedroom suite. The bedroom and the living room open to a 280-square-foot balcony facing the sea. The third floor has two bedrooms that share a bath, and a third bedroom suite; all the bedrooms open to an 880-square-foot sea-facing terrace. The top floor has its own 450-square-foot rear-facing terrace, along with two bedrooms and a bath. The rear garden is landscaped with orange, lemon and fig trees, said Gilles Marette, the owner.
The villa is being sold furnished. Floors are beige tile and painted hardwood. The bathrooms have high-end Italian-made fittings, and the kitchen has oak cabinets with American-made appliances, Mr. Marette said.
Kobas, a fishing village with only a handful of families, is connected to the main highway by a rough roadway; visitors must walk the final 300 yards to the villa. Mr. Marette says he had plans to add a driveway to the road, which would make it much easier for contractors to come construct a water tank for the villa. (Water in Kobas is in limited supply.) Most visitors arrive via the sea, and two to three boats can be moored at the villa’s quay, where the water is more than seven feet deep, Mr. Marette said.
“This is a very rare place where you go only with a boat, and you can really enjoy the holiday feeling,” he added. “It’s a very tiny village, with three restaurants, and two are the best in Croatia.”
The Peljesac Peninsula is known for its secluded coves, vineyards and seafood beach bars, including Tavern Ribarska Kuca Niko and Gastro Mare, Mr. Marette said. There is limited grocery shopping in Kobas; the best shopping is 10 minutes away in Ston, a tourist destination with about 2,450 residents, about 10 minutes away by car. Dubrovnik is about an hour’s drive, and can also be reached via two successive ferries, the first originating in Papratno, which is about 10 minutes from the villa by car.
Croatia’s entry into the European Union last July has had little effect on the housing market, which has remained largely stagnant after prices fell about 30 percent in the global real estate crisis, said Jelena Cvjetkovic, an associate with Savills International, who has this listing.
But because development ground to a halt with the crisis, brokers are now working with a very low inventory of resales, said Tim Coulson, the owner-director of First Property Croatia in Split. Certain prime areas popular with wealthy Europeans — for instance, the Old Towns of Dubrovnik, Split and Rovinj on the Istrian Peninsula, and waterfront homes on the Adriatic — are seeing price increases, he said.
“You can say that Dubrovnik has seen price drops of around 30 percent since 2007,” Mr. Coulson said in an email, “but now we are seeing a solid recovery of those desirable properties in the right locations, especially next to the sea.”
Prices in Dubrovnik’s Old Town are typically about €3,000 to €4,000 a square meter, or $385 to $513 a square foot, Ms. Cvjetkovic said. Properties outside Dubrovnik on the waterfront, like this villa, typically fall within the range of about $1.65 million to $2.5 million, she said.
A plot of land or a home on the islands off the coast of Split, among them Brac, Hvar, Vis and Solta, can also be a big draw for certain buyers, Ms. Cvjetkovic said.
“These might have direct water access, so that’s another thing that’s popular,” she added, “but that’s a particular buyer, who’s into sailing and has been to Croatia several times in a boat. We see a steady stream of this type of buyer, but no massive increases.”
WHO BUYS IN CROATIA
Before the financial crisis, the British and the Irish were the most frequent foreign buyers. Today there are still European buyers, as well as Americans. But brokers are seeing more interest among Russians and citizens of former Soviet Republics like Ukraine.
Croats who live elsewhere but want vacation or retirement properties back home represent a strong segment of the foreign market — as do expatriates from Bosnia and other parts of the former Yugoslavia, Ms. Cvjetkovic said. “People from the former Yugoslavia who are now living in Europe etc. are returning to buy here,” she said.
Foreigners don’t face buying restrictions in Croatia unless their home country restricts Croatian buyers, brokers said. This reciprocity rule allows citizens of European Union countries to buy in Croatia without restrictions, and most recently, Ukraine instituted a reciprocity agreement with Croatia, Mr. Coulson said.
For Americans, reciprocity depends on state of residence. More than half the states in the United States have reciprocity agreements with Croatia, including New York, New Jersey and Connecticut, brokers said.
Buyers from areas without reciprocity are required to set up a Croatian ownership company, at a cost of about $1,400, in addition to monthly carrying costs of about $210, Mr. Coulson said. The company should be seen to generate income, which can be achieved by renting out the home when not in residence, Ms. Cvjetkovic said.
Doing a title search is imperative in a Croatian transaction, Mr. Marette said. Buyers pay a 5 percent transfer tax and lawyers’ fees of 1 to 1.5 percent, brokers said. However, a buyer taking over the shares of a company that owns a home, as would be the case with this villa, avoids the transfer tax, Ms. Cvjetkovic said.