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Germans scooping up real estate on the Croatian Adriatic Canva

Germans scooping up real estate on the Croatian Adriatic

Written by  Jun 19, 2022

Jens and his family from the German state of Baden-Württemberg have fulfilled their dream, they now own a luxury villa with a swimming pool and sea views. It all started with a joint vacation of his family and his sister's family in Istria, reports N1. They really liked this region, but the rent for a large enough and well-equipped villa with a pool was quite high. So they decided it would be worthwhile for them to own their own house. They searched for a long time, but failed to find something they liked.

And then they discovered a beautiful construction site on the edge of a fishing village in the south of Istria with magnificent sea views. And they decided to build. "It was simpler than we thought," said Jens, 53. He says the price of construction materials is about the same as in Germany, but that labour is still significantly cheaper. And so last year they finished building their villa with a swimming pool, and this year they already have the first tourists, writes Deutsche Welle.

They took out a construction loan in Germany, and plan to repay it by renting a house in periods when they do not use it themselves.

Oliver, 55, from Bavaria, decided to "build, not rent" with a similar model. "It simply came to our notice then. From Italy we moved on to Istria and there we saw beautiful cities, clear seas and clean beaches. That immediately won me over,” said this German. After that, he says, they spent a couple of years in the south of Istria and decided to buy a house. But they, like Jens' family, could not find anything suitable, so they decided that it was better for them to build according to their wishes and needs.

A few years ago they found one beautiful and large construction site. The original intention was to build for their own needs. But on a plot with a fantastic sea view, the construction of a larger facility was planned. "I asked the seller, 'What am I going to do with a family of three on 500 square meters?' And he said, 'Well, build apartments and rent them!'" said Oliver. And so a larger building was created in which his two-level private apartment with an imaginatively decorated pool and three apartments for rent is located. "I founded a company in Croatia and got 25 percent VAT back when building the facility," he explains. He already has a company in Germany for the sale of machines for industrial plants, so he started sales through his Croatian company. "Everything we did through Croatia, all the way to the motorboat that belongs to the company, these are interesting tax models," says this German entrepreneur.

He admits that renting is worthwhile, but addsed, "In the meantime, it has become difficult to rent in Croatia if you do not have a swimming pool, because the offer is very large."

And really, all over Istria, like mushrooms after the rain, mostly luxury villas with swimming pools are springing up - despite the drastic increase in construction costs. "In the meantime, the pool has become important if you want to make a good living," explains Oliver.

Jens and Oliver are just two of thousands of Germans who own real estate in Croatia. And there are more and more of them every day. According to recently published data from the Tax Administration, foreigners bought 9,514 properties last year, which is 50 percent more than a year earlier. Germans, Austrians and Slovenes buy the most. Real estate sales to German citizens rose by as much as 70 percent last year.

Many foreigners buy for their own needs, but more and more are investing in this way. Because renting real estate has obviously become a lucrative business in Croatia. Tourism is booming again after the pandemic, apartment and house rents are rising, and taxes are relatively favourable for foreigners as well.

Foreigners are mostly buying by the sea, and every fourth buyer on the coast does not have Croatian citizenship. This is especially true for areas that can be reached relatively quickly by car. That is why real estate in Istria and the northern Adriatic is the most attractive for Germans and Austrians.

Of course, the growing demand is also reflected in prices, last year, the price of real estate on the coast rose by 11.7 percent.

 

The Voice of Dubrovnik

THE VOICE OF DUBROVNIK


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