Is Istria for you? Let’s have a look at the Istrian property market

Looking for a property in Istria? Buying property abroad is far harder than buying at home. You don’t know the area, you don’t know the ‘rules’ and local customs, and you’re heavily dependent on, probably biased, outside advice. I can’t cover everything about the Istrian property market in one article, so here’s an overview, to help you judge if Istria might be the place for you. It covers the different regions, outlines who’s buying property in Istria, reviews the types of property available, and  concludes by asking if recent EU accession will make a difference. But before that, the basics … where is Istria and what’s it like?

 

Where’s Istria?

Beautiful Istria - Draguc in autumnIstria is the triangular peninsular in the north of Croatia, jutting into the top of the Adriatic Sea, just across the water from Venice, Italy.

Set in a climatic sweet-spot in Europe – just far enough south to get plenty of summer sun, yet not enough to be seared dry by the scorching sun – Istria is undoubtedly beautiful. Its rocky coast-line is rimmed with pines and atmospheric old towns. Its hilly, green interior is dotted with time-forgotten, hill-top villages, oak forests, olive groves and vineyards. It’s not the new Tuscany it’s often touted to be – only in the north is the landscape that rugged. For the most part, it is quintessential Southern Europe. A world that elsewhere has, all too often, been developed out of existence. It is a land where we still have spring flowers and butterflies, and where you can find quiet, sun-kissed, stone villages; empty country roads and good, affordable restaurants. No, it’s not Tuscany, it’s Istria.

restoration project near VisnjanSounds too good to be true? Well, everything in that paragraph is true, but Istria isn’t perfect, far from it. We get rain – how do you think things get so green? But in general the summer months are dry, warm and blue-skied, or certainly much more than northern Europe. We have winter – it can be cold and grey for days on end, like the rest of Europe. But that’s just an excuse to curl up in front of the open fire with a good book and a glass of wine. It’s got irrational, ever-changing laws – that’s… well that’s one I can’t talk my way out of. For me, Croatia’s seemingly arbitrary government is probably the biggest black mark against the country … followed closely by its impossible language!  It’s also not an easy place to run a business or simply get things done, as local tradesmen, many of whom are highly skilled, often have limited concepts of service or time-keeping. And Istria is very rural, which is great … but has the associated difficulties of anywhere rural (such as limited public transport, services & shops spread all over and so on.)

 

The regions

map of IstriaThe Istrian property market is divided into four clear geographical regions, with the coastline being far more developed than the interior:

  1. Most developed is the west coast from Savudrija in the north, right down to Medulin in the South.
  2. Next is the rugged east coast, just north of Pula up to Opatija.
  3. North inland Istria, in the hilly areas around Motovun, Grožnjan and up to Buje (the new Tuscany), is the third region.
  4. The rest of inland Istria is almost totally undeveloped.

As you would expect, prices follow this divide, with the developed coastal belts commanding far higher prices than the less developed interior.

 

Who buys in Istria?

New project near TarMost property-buyers in Istria today are foreigners, buying holiday homes. For the Porec-based estate agency, Tetida, only about 20% of their business is with Croatians and at least half that is with people from Zagreb looking for holiday homes. The rest is with foreigners.

So who buys what? There are national stereotypes – Slovenians are supposed to like small places by the sea, Germans want to live in the heart of a village, the British and Irish want rural retreats and the Italians buy everything. But when it comes down to it, these are just stereotypes. As Karlo, from another agency, Habito, explained “People buy all types of property, more depending on their personalities and budget, than national traits.” It’s also a practical decision. “Most buyers come from countries which share borders with us,” he said, “which is Slovenia, Germany, Austria and Italy. For them, we’re the closest seaside and they can drive to their holiday houses.”Bungalow near Porec

What about the British, Irish and Russians? “Our property boom largely came through the British and Irish buying properties,” explained Azra from Tetida. “They’d raise a mortgage against their property at home and then pay the mortgage from holiday rental earnings.” Not surprisingly, when the property market crashed in northern Europe, these customers dried up. “They’re now beginning to come back,” said Azra, “But nowhere near as many. Now, the problem getting a tourist classification to rent is also acting as a deterrent.”

View from an apartment in PulaAnd the Russians? When the good times rolled, it seemed as if rich Russians were going to buy the whole peninsular. With harder times, there are far less of them now. “It’s not easy for Russians buying in Istria,” explained Azra. “Because they come from outside the EU, they cannot buy as individuals. They have to set up, and buy through, a company. While that’s not difficult, it adds a layer of complication and cost. With the economic downturn, most of our Russian business has dried up.”

According to Karlo, however, the richer Russians are still there, they’ve just moved their attention away from Istria. “They want large coastal properties with yacht moorings. These are far more common in Dalmatia, so they’ve shifted their focus down there.”

 

Why do people buy in Istria?

Ruin near BaleAs I sat chatting with Azra and Mandica on the terrace outside Tetida’s office, I asked them why they thought foreigners bought here. Was it just the sun? Both were adamant. Of course the weather and sea are important, but it’s not just about buying a slice of sunshine. As Mandica put it, “It’s about buying lifestyle, rather than a tan. It’s about buying peace and quiet, a slower lifestyle, a chance to relax.”

“It’s also about buying history,” added Azra. “With its beautiful old villages and towns, Istria has a mystique. You can feel history in the atmosphere, through the soles of your feet.”

 

What sort of property is available?

Restored stone house near PorecWe bought our house here nine years ago and since then, the property market has totally changed … and is completely the same. During this period it has boomed, with prices rocketing and new developments sprouting up everywhere. Then, along with the rest of the world, the property market crashed and prices have dropped back to nearly where they were nine years ago. With a lot of houses built during the boom remaining unsold and many developers going bankrupt, the main difference now is that there’s far more available. 

New apartment building in MedulinSo what sort of property is on offer? Well, pretty much whatever you’re looking for, from ‘cost-effective’ studio apartments close to the sea, through to multi-million Euro, walled estates. Whether you’re looking for a turn-key solution you can lock-up and leave while your away, or a property you can rent to earn its keep; whether you want a renovation project or a restored old barn, a modern villa or a modern stone house – there’s something for everyone. In particular, at the moment, within 10-15 km of the sea, there are numerous half-finished new stone properties with pools for sale at bargain prices, as developers desperately try, if not to make a profit, then at least recoup their costs.

 

Will joining the EU make a difference?

Restored house near Sv. VincenatBoth Karlo and Azra see EU membership as a real game changer. “Even before we joined it made a difference,” said Karlo. “As soon as the announcement was made that the date was set, enquiries picked up over night.”

“Until now most foreign buyers have been buying a holiday home,” said Azra. “Now we’ve joined the EU, it opens up a whole new market. We’ll have more people looking to move here for work. And, with our fantastic climate, we’re an ideal retirement destination.”

Newly built house near Umag“Not only that,” added Karlo. “Although we’re geographically part of Europe, until now, many people didn’t consider buying a holiday home here as it seemed a bit too ‘foreign’ – outside the EU was a step too far. Now we’ve joined, all that will change.”

While the property market will change and more buyers are now considering buying here, will Istria itself change? Inevitably yes, but I expect the change will be slow – attitudes, traditional practices and infuriating bureaucrats won’t change over-night simply because Croatia has joined the European club. But eventually change will come, as money flows in and the practicalities of everyday life become easier.

As more and more people discover Istria, will it go the way of Spain and Greece, with row upon row of developments? I hope not. We discovered Istria eight years ago and it’s bureaucracy might drive us insane, but it is still a beautiful, unspoilt part of the world and I’d like it to think it will stay that way.

My thanks to Azra and Mandica from Tetida, and Karlo from Habito for their help with this article. If you would like an idea of what property is currently available, have a look at their websites Habitoproperty.com and Tetida’s agencija.hr. Both are based in or near Porec but have some properties across the whole peninsula. Also see our Estate Agency Listing for other agents or, for a view of what’s available in the rest of Istria and Croatia, try RealEstateCroatia.com or foto-nekretnine.hr

 

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