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Factors
Driving Economic Growth
Quality property investments are among the most secure of all
investments, and historical experience indicates that
speculative investment in emerging economies normally offers
higher returns with lower initial capital requirements than
investment in developed economies. Further, investment in
emerging economies gives investors the benefit of higher
potential growth when compared to more established markets.
EU Candidate Countries
EU candidate countries are in general beneficial places to
invest, in particular when a candidate country receives EU
funding and investment before being accepted as a member.
Croatia has received such funding and investment, and it is
reasonable to expect to see the same degree of property
appreciation in Croatia as was seen in other EU candidate states
immediately before their accession. Investors in Croatia will
also be protected by the EU legal framework. Joining the EU will
further align Croatia’s legislation with EU standards and will
ensure increased efficiency and capital growth in the same way
that this has been experienced by buyers in other countries.
Growing Tourist Industry
Croatia was voted the Number 1 destination for 2005.
According to the World Travel and Tourism Council travel and
tourism demand in Croatia is expected to increase by 6.9% per
annum over the next ten years. This can be compared to the
annual average growth of 4.2% projected for the European Union
as a whole.
The Croatian government has the development of the tourism
industry as a major priority. Coupled with expected EU
membership this indicates that in the long term tourism-related
real-estate development will continue in an increasingly wealthy
industry sector, backed by a stable and prospering general
economy.
Housing Equity
Whereas it used to be difficult for foreign individuals to
secure finance to purchase a property in Croatia, today this is
much easier and finance is becoming widely available. Mortgage
finance for main residence or foreign purchase is becoming
readily available on increasingly flexible terms.
Foreign Direct Investments
Croatia has had the benefit of a steady flow of foreign
direct investment which totalled €11,200 million between 1993
and 2005. Foreign direct investment has been shown to be the
main driver of economic growth in the transition process in
Central and Eastern European countries. Within Central and
Eastern European countries, the main stimulus to the economy has
come from foreign direct investment, which has driven the
economy when domestic sources of investment have failed to do
so. This is expected to continue. Expanding markets, low wage
costs, a large base of skilled employees and the increasingly
stable economic and political environment (particularly in the
new EU candidate countries) continues to tempt foreign investors
to transfer their capital to Central and Eastern Europe.
The prospect of entering the EU in 2012 will allow Croatia to
continue to attract these high levels of foreign direct
investment.
Planning Regulations
New planning laws protect Croatia’s coastline from
over-development and result in land which is approved and
immediately available for construction being in short supply.
Any construction taking place is of a very high standard and
reflects the increased interest of foreign property owners and
an ever more discerning local market. Knowing that the
picturesque coastline of the country will be protected, an
increasing number of property investors are attracted to the
area, and the limited supply of land where construction is
permitted serves further to increase residential prices.
Infrastructure
Croatia's road network continues to be extended and to improve.
New roads and railway networks are being funded by the World
Bank and reduce commuting time, and people will buy property
close to areas with good transport facilities. Investors are
therefore able to analyse transport improvements and identify
which areas of Croatia are likely to be future hot-spots for
tourism and thus for investment capital gain.
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