Dream Estates Croatia
An International Associate of Savills
Dream Estates Croatia has been the exclusive associate of global real estate services group, Savills, for more than 20 years. As Savills associates in both Croatia and Montenegro, this allows us to provide a broader range of choices to our clients and an opportunity to study 2 markets under the umbrella of one company. Both markets are very different when it comes to all aspects of property choice, price points, lifestyle options and buyer’s profiles. Whereas Montenegro certainly has excelled in attracting global brands and snazzy mixeduse resorts, Croatia has advanced in terms of access and infrastructure. However, the 2 countries’ real estate markets have more in common than divides them and from a travel and investment perspective, guests are increasingly seeing one coastline as an extension of the other. Vedrana Kelleher, owner and director of Dream Estates Croatia discusses the business and the market in this feature.
Tell us about your history, experience, and expertise in your respective market including why sellers and buyers should choose you as their preferred partner?
Dream Estates Croatia, the exclusive associate of global real estate services group, Savills, have been present in the market for more than 20 years, operating from their head office in Dubrovnik. Dream Estates / Savills Croatia operate in two key market segments – transactional sales and Development Consultancy Advisory. Over our 20 years’ experience in Croatia, we have looked after the property needs of hundreds of clients from more than 30 countries. In turn, we have been development advisors to practically all pipeline product on the Adriatic.
How do you foresee your market in 2024 and beyond? What is the probable price growth, the arrival of new projects, buyer profile and nationality changes etc).
We operate in 3 distinct regions in Croatia – Istria in the north, The Split region and Islands and of course, the Dubrovnik Riviera.
Each region has its own characteristics as regards buyer profile, price points and supply. The Croatian diaspora remains very strong across all markets. Istria is dominated by the ‘drive to market’ from Western Europe with Germans, Austrians and Slovenians expected to be the predominant buyers and a good pipeline of supply, particularly of inland villas. Price growth in the region is expected to continue to deliver up to 5% per annum.
The Split region has really redefined itself over recent years from a place to pass through to becoming a real destination. This is reflected in very strong price growth which is expected to continue this year. Supply is moderate and the absence of significantly sized mixed use resorts is discussed further below. The Split region is dominated by regional 2nd home buyers with a younger age profile.
Dubrovnik continues to be the shining star as regards price growth and rental yields. The lack of supply in the market driving both year on year. With price for prime properties reaching EUR10,000 / m2, demand continues to be very strong from an older age profile of Western European buyers or locals looking for rental income. Strong demand is seen from the Croatian diaspora and neighbouring countries, seeking to have a dream home in the Dubrovnik Region. The demand from the diaspora group is usually originating from the USA, Canada, Australia and Western
What are some key insights and your tips of areas or property types which potential buyers should be aware of for future potential growth?
For yields of over net 5%, and yearly capital growth, investors can rarely go wrong with property in Dubrovnik in their portfolio. We do expect changes to the planning laws this year to restrict rental properties in the Old Town of Dubrovnik, to allow, rightfully, citizens to enter the market, so this window of opportunity is narrowing within the town.
What are the primary challenges your agency faces in the current real estate landscape, and how do you address them?
The main issue we face in Croatia, which has been overcome by neighbouring Montenegro, is the delivery of large-scale mixed-use resorts. While Montenegro has delivered top-class branded hotels and resorts, the planning process and laws in Croatia are a detriment to investors.
Green sites for development tendered by the government come with typically a 99-year lease and no visibility as to what happens thereafter. In turn, the timeline to get a project through planning and to the market can take more than 5 years. In markets such as Dubrovnik, we are missing the ‘software’ such as shopping and entertainment to meet the expectations of investors paying such prices. In essence, we are missing a vision and strategy in real estate as we are in tourism goals. There is a significant pent-up demand for exclusive high-quality villas and apartments which is not being met.
We are very pleased to have been involved in development consultancy – advising developers of pipeline mixed use resorts in Dubrovnik, Split and Istria which will bring a significant new level of luxury and branded residences to the market once approved. We commonly remind stakeholders that the value brought by a project such as Porto Montenegro can be seen first-hand in Tivat, where everyone is a winner. Especially the locality, proven in Tivat, which now has one of the highest prices for real estate on The Adriatic, not factoring in Porto Montenegro.