Croatia's property market booms

[architect]

Found this article on the net...

Croatia's property market booms

VIR ISLAND - Gaudy facades and lion statues sprout everywhere, anything goes and the island's Mediterranean scenery is being devoured by concrete at a high pace to meet the demand of Croatia's booming property market opening to foreign buyers.
In 2003, real estate prices rocketed on Croatia's more than 1,000 kilometre (600 mile) long Adriatic coast which is again figuring among Europe's top tourist destinations.

Renaissance villas in the most famous resort of Dubrovnik, traditional stone houses on the islands, but also hastily built apartments on less attractive spots, are selling like hot cakes to rich buyers from both western Europe, notably from Germany, and post-communist countries.

According to official figures a total of 482 permits to buy a property in Croatia were granted from January 2002 until September 2003. But the number of requests is far higher since decisions on many are still pending.

However, the island of Vir, off the central Adriatic coast, testifies the flip side of the construction boom — a town planning nightmare with dozens of new tacky buildings being built just a few feet from the sea without an adequate infrastructure.

"If the island is not soon furnished with sewers we would be facing an ecological disaster," said Endre Meszaros, the Hungarian owner of the Via Vindicta real estate agency, showing the streets crammed with new houses without space between them.

Vir, which has a population of around 2,000, during the summer season hosts some 70,000 guests.

"The sea is very clean for now, but if this continues we would have no more tourists," added Meszaros, who set up his business on Vir three years ago bringing in the first buyers from Hungary.

"Vir was the island closest to Hungary," he explains simply adding that some 300 properties have been sold to his fellow-countrymen so far.

Vir, connected with the mainland with a bridge and also partly with the capital of Zagreb by a highway which is to be completed by 2005, is an ideal location for buyers from the neighbouring Hungary.

Also, a middle class Hungarian family still can afford the relatively low prices per square metre, ranging from 700 to 1,500 euros (800 to 1,700 dollars).

The Croatian tourism ministry has been repeatedly warning of a problem of uncontrolled building of apartments by private firms in areas reserved for construction of exclusively tourist facilities which started after the country's 1991-95 war of independence from the former Yugoslavia and the gradual recovery of Croatia's valuable tourist industry.

AFP

[Peter]

That is only half the story. Isn't Meszaros the fellow who built the 300 homes without planning permission that the government is threatening to demolish?
They might turn a blind eye to the odd bit of construction where the neighbours don't object, but 300 houses in one place sold to foreigners from a single country and without any planning permission is asking for trouble. It is simply too big and too political to ignore.
Foreigners buying as individuals know that they need foreign ministry approval. Typically, and providing there is reciprocity, this takes 6 months. On the other hand, if they see a lot of foreigners all from one country in one small location swamping the place, the applications could take a long while to reach the top of the pile.
If they never had planning permission, they won't be in the Land Registry. If they are not in the Land Registry, the contracts won't stand up. They probably won't get foreign office permission, unless the Hungarian govt has leverage and can be bothered with such things.
300 houses means a minimum of 600 Hungarians and more likely 1200, in one small place, virtually outnumbering the locals. Such things are very sensitive.
Meszaros may well moan about lack of sewers. If the places had been built with proper permission, sewers might have been built, but if the government was never aware in advance, why should it have known to build sewers?
The situation on Vir is very serious . This is the sort of situation that starts the rumours about foreign office permission taking 12 months or more.
Property that has correct documentation from applicants from countries that offer reciprocity, like the UK and Ireland, should not take much more than 6 months. Property with dodgy paperwork could take forever.
BTW, Why he claims it is nearest to Hungary, I cannot imagine. Krk and Rab are much nearer.

[Graham - Bosmere]

Vir is not the only place where the government are treatening to knock down houses built without permission. Even on some of the quieter islands people have built without permission and individual houses are under threat. If you get offered a bargin of a house beware and get it checked out thoroughly. Another aspect that may become important in the near future is regarding sewerage disposal. Many of the houses built on or near the coast discharge untreated sewerage directly into the sea. I can not imagine that this will be permitted to go on for much longer and pressure will then be put on the owners to create a suitable disposal system, but at what cost.