Establishing value for properties in Croatia varies considerably and depends on the type of property you are looking to value. However, you could consider one of the following three options or a combination of all three:
1. Find properties that are similar to the one you are interested in buying, how much they are being offered at or better how much they have actually been sold for.
2. Finding out how much net income you could generate based on other comparative properties in the local area that are similar to the one you are interested in purchasing and then calculate the yield.
3. Looking at what it would cost you to build the property from scratch taking into account the hassle and risks involved.
One of the problems with valuation for second homes in Croatia, especially new build villas with swimming pools, is there are so few of them from which to gather comparative data. This is less so in the Istria region in the north of Croatia where the market is more established and during the recent boom a considerable number were built (although a lot lower than in other established second home markets).
However, in Dalmatia it is much tougher as the market is less developed and due to the crisis and an overly political planning system (although now getting much better) there are very few new developments especially those featuring new build villas with swimming pools. Therefore it’s a good idea to research and use whatever information you can gather from any of the above three options and then draw some conclusion from it. It is far from an exact science but it will help. This coupled with viewing different properties with a good agent who will explain the advantages & disadvantages will start to give you an insight into value.
For apartments the situation is different. In many areas that are close to an airport or town you will find apartment developments many of which were built during the boom period at the beginning of this Century. As a result it is much easier to establish value due to the volume of available comparative data since the number of actual transactions is much higher due to a far greater supply of product on the market. It means with some research you will quickly establish whether something is worth €2000 per m2 or €2500 per m2. In fact if you do enough research you should be able to work out what something is worth within say a 10% margin meaning €1800 per m2 or €2000 per m2 for example. Of course establishing value it only one aspect of a purchase, the emotional aspect often plays an important role and can be a decisive factor but it is always good to know whether you are being ripped off or not.
Those of you who are interested in purchasing building land in Croatia, there is often a decent amount of comparative data available, although it depends in which location and what position you are interested in. For example to value building land by the sea, the supply of the land is low but those plots which have sold, are consistent in terms of the prices paid. This makes assessing value much easier. Moreover, building land plots 2nd, 3rd, 4th row or inland several km the same applies. There are of course variations according to views, surroundings, direction, an ease of construction. However, assuming a plot has access and utilities finding comparable land plots, which have sold and therefore establishing value of the land plot you are interested in buying is relatively straightforward.
For further information on valuation services please contact us.