Why to buy a property in Croatia?

First of all, I have to say Croatia is a beatiful Country!!! To visit for your holidays. And basically that’s it.

I’m living now in Croatia since the beginning of 2002, were I arrived with a nice amount of money in my bankaccount. My nationalities are German (father) and Croatian (mother), as like 1.100.000 other “Gastarbeiter in Deutschland” when I was  born.  I moved here to Croatia after being educated in Germany and also worked in London for a couple of years. I bought a house, invested in some businesses, got married (and also divorced), planted my seeds here in Croatia and “I AM DISAPPOINTED”!!!

I put the title “Why to buy a property in Croatia” so that more people would read that!! So I will start with this one.  I bought a nice house ten years ago, and still am happy with the house, but after ten years I can not even sell the house, as the government change the amount of permits and certificates you must have, that I’m not even allowed to advertise my house for sale any more. The situation here, if that is laws, permits, PM or whatsoever changes nearly on a daily bases. VAT is raised numerous times over the last years, there is talk about property tax (but nobody knows when and how much) but the worst of all are corruption and the lack of law and qualified people to inforce the law. Croatia is actually ranked far above most African Countries in regards of corruption. There is an report written by Dr. Jelena Budak, which is not even close to that what is still hidden in the gray zone.  So why to buy here??? You must be totally cracked out your head. A survey by German Handelsblatt showed already (before Croatia was a Member of the EU) that this will be the new Greece. New surveys (beginning 2014) shows that Croatia is on the same level like Cyprus and Greece. The later are both in a stage of recovery, but Croatia is further going into Recession! And that now six years in a row.

Political situacion, Economy and so on

Lets start with unemployment in Croatia which is just above 20 something percent, due to seasonal work it is getting now a bit down. Most worrying is the fact that Youth Unemployment Rate is nearly 50%. Unemployment Rate in Croatia is reported by the Croatian Bureau of Statistics of which you can see a chart here. Average earnings and spendings for an average family are not comparable. Basically every family here has a negative balance by the end of the month. I have  read an article from one newspaper here based on data from 2013 that each family has a deficit of 3.300kuna per month. Whereas each family has nearly 2.700 kuna minus in their wallet in a survey for the Year 2012 by GfK, so the increase in nearly 600 kuna per month is a good indicator were this Country is heading. Buy the way 1 € = approx 7,50 kuna.  Unemployment was a good indicator for Spain, Greece, Cyprus etc. that something is wrong.

Back to the political stability in this Country (as the buyer of a property could not care less about unemployment mentioned above), as many of you might have heard our former PM Sanader is in Jail, with him quite a big number of other high ranked politicans. After changing government two years ago from democrats to socialists, we now face the same procedure, as a couple of years ago. Whereas, first off all the new government sacks the Governor of the Croatian National Bank Željko Rohatinski who won the Award for Best Central Bank Governor of Europe and the Best Central Bank Governor of the World in 2008. Now the Finance Minister Linić is getting sacked, the PM Milanović is under investigation for some doggy loans. So we are looking at a stable situation here (this is a joke). There are daily news about more corrupt politicans, civil servants and other.

Let’s move to property law, legal situation quality of judical system etc.

Croatia is actually one of the most sued Countries before the ECHR and at the same time the one with the most violation in regards to human rights. A lot of those cases are dating back to 1948-1949 or the time of the civil war in former Yugoslavia. But still, if you might buy a property which has no old owner or some dead body in the cellar, you still might get into jeopardy as your documents might just vanished like in the fire in Opatija landregistrar office a couple of years ago. Looking at the number of violations, in regards to times a trial can run (the EU says a max of 5 years), Croatia is again by far one of the leaders in the EU with trials of up to 10-20 years a normal thing. At present there are over 800.000 unsolved cases before court. One of the best examples for the uncertainty of ownership or the land registrars, is like in this case I’m just studying in regards to Villa Münz in Ičići whereas the property was first nationalized in 1948 and the owner was later paid for this magnificent villa 12 freight cars of oranges as a compensation. Sounds bizarr, I know.

As this post is getting a bit long, I will add some additional posts in regards to the situation in Croatia on a daily bases. So do not forget to sign-up for my newsletter (the form is at the bottom right of this site). M.S.

Why to buy a property in Croatia?