The Heart Shaped Peninsula
Istria is the largest peninsula in the Adriatic sea and is an enchanting region that offers spectacular coasts, unique Roman monuments, and exquisite cuisine. It also offers an extraordinary opportunity to build your wealth with an investment property.
This is because Croatia is hot right now with both the number of tourists and property prices increasing1 . And due to the recent success of the Croatian national football team in the 2018 FIFA World Cup, and the use of Croatia as a backdrop for Mamma Mia! Here We Go Again, Game of Thrones and Star Wars, enthusiasm for the country shows no sign of diminishing.
In 2018, 19.7m tourists visited Croatia generating 106m overnight stays. These were increases of 6.5% and 4% respectively compared with 2017. Istria received over 4.4m of these tourists, generating 28m overnight stays2. Tourist accommodation in Istria is in high demand and very often is fully booked months in advance.
Part of this increase is due to an organic growth, with many tourists returning after enjoying themselves and new tourists arriving through word of mouth recommendations from family and friends.
Traditional tourists to Istria come from Germany, Slovenia, Austria, Italy, Czech Republic and Slovakia due to their vicinity, allowing them to come by car. However, in the past 10 years, the number of tourists from France, the Netherlands, UK, Ireland, and Poland has increased. In fact, Istria’s airport in Pula had a 36.5% increase in passengers between 2016 and 20173.
A lot tourists coming to Istria are high spending families or couples attracted by its cultural, natural and gastronomic attractions. Another factor that makes Croatia generally attractive to tourists is it being very safe, with an absence of crime and internal problems. Croatia has been ranked among one of the safest countries in the world for tourists to visit, being ranked 24th in the 2017 Travel & Tourism Competitiveness Report4. Croatia is also very tourist friendly with most local people speaking at least three languages (Croatian, Italian, English, or German)5.
Also making Croatia attractive to property investors is that property prices are growing on average 2.3% annually. Istria has some of the highest growth with an average of 3.13%. In particular, properties in Pula saw a rise in value of 12% last year6. However, there is limited space to build on Croatia’s Mediterranean coastline, with 90% protected and set to be untouched.
This growth is expected to continue, being stimulated by investments in Croatia. Between 2014-2020 the EU allocated almost €7b to boost economic competitiveness7 and €12.7b for structural investments. Between 2021-2027 these amounts are expected to rise.
Private investors are also pouring money into Croatia, with €7b expected to be invested in hotel construction and renovation, convention centres, campsites, nautical tourism and theme parks by 2020. And with Croatia’s economic outlook being upgraded to BB+ and healthy GDP growth expected (2.8% in 2018 and 2.6% in 2019), more investments, and real estate investing are foreseen in the coming years8.
Examples of such are:
- €270m by the Valamar Group to build both new resorts and refurbish it’s current facilities9;
- €80m to build the most luxurious hotel in Croatia, in Rovinj, Istria, by the end of 201810;
- A €65m new resort and marina in Pula to be completed by 202011;
- €11m for a new winery in Motovun, Istria, that includes a hotel, restaurant, multi-purpose hall, wellness centre, lounge bar, and nightclub12.
A growing country with a secure economic situation and advantageous fiscal conditions is a country where you can invest with peace of mind. In Istria, many investments are taking place, which are additionally increasing the value of the properties in the region.