You already know that Dubrovnik is the most prestigious market in Croatia when it comes to real estate. After the global financial crisis during which the prices dicreased aprox. 30 %, market is finally stabile again. The recipe is simple: When it comes to buying a property, buyers are looking for good locations and fair prices. After Croatia joined European Union in 2013, EU- citizens can purchase propreties freely. But still, it can get pretty hard finding a perfect place since some vendors are sometimes very unrealistic when it comes to pricing. We found a perfect person to talk about real estate in Croatia who gave us an insight into her interesting world of properties. Meet Mrs. Vedrana Kelleher, owner and GM of Dream Estates Croatia, who has, along with her husband, Kieran Kelleher, founded a real estate company in Dubrovnik and Montenegro, exclusive representatives of Savills UK.
You and your husband established Dream Estates Croatia nearly 12 years ago. How would you describe the changes in Dubrovnik’s property market during this period?
The early years were very promising with a large influx of foreigners wanting to get into the market at attractive price levels. 2008 and the arrival of the global economic crisis slowed foreign interest considerably. This period since 2008 saw slow growth in the market with local’s looking to purchase primary homes or property for ‘buy to let’ purposes and Croatian’s living overseas were also prominent. 2016 and 2017, after several years of a sluggish market, has shown signs of a rebound in the market. Enquiries and transaction levels are showing a promising increase. Prices are growing steadily with up to 10% growth in 2016 and we would forecast a similar performance in 2017. Our challenge in Dubrovnik now is ironically supply. We do not have sufficient properties fitting the purposes of our clients and our daily challenge is to find property for our waiting clients.,
– At the same time you and your husband opened the agency in Montenegro called Dream Estates Montenegro. In the last decade, Montenegro has been using the foreign investment to initiate numerous large-scale projects such as Porto Montenegro, Dukley Gardens, while some of them are still in development (i.e. Lustica Bay). It often happens that investors choose between the two countries for a specific project. Do you think that Montenegro was more tempting for investors because of many country’s incentives? What, in your opinion, are the steps to promote Croatia as an attractive destination for foreign investors?
The direction and flow of investment into any country is like the path that a river chooses – the path of least resistance. Large investors into resort developments for instance often passed up Dubrovnik for reasons of being disillusioned and disappointed as they are overwhelmed with bureaucracy, legislation, taxes and uncertainly – frequent law changes – the ongoing saga on Srd for instance is not doing anyone any favours when it comes to assuring large investors that they are protected when investing in our region. It appears that Montenegro has been eager to continually simplify the planning/legal processes and providing assurances to investors in the fact that they are welcome. Originally pricing was a key factor why many investors turned left on exiting Dubrovnik Airport but this is no longer the driver as the markets are now similarly priced (except when we compare Kotor Old Town to Dubrovnik Old Town). Investment (like tourism), is a fickle fragile business. Look at tourism in Turkey, Egypt and overbuilt Spain and how it changed through the years. We should not take anything for granted and continually look to improve our offer in each sector. We should encourage and nurture potential large resort style investors who can deliver tremendous value to our region by increasing the tourism offer and employment. To do that we need transparency, incentives and assurances that they will be able to deliver their projects and ultimately make profit (we need to see profit as a good thing!)
You’ve been a real estate agent for a long time, but you still find excitement in the business and you’re still spending much time viewing properties with the clients. What are your biggest challenges and your biggest motivation?
We are very fortunate to be in the Dubrovnik market. We were quoted in The Times UK newspaper recently – “London, Paris, Dubrovnik the cities that can weather any economic storm”. Although a bit sensationalist, there is some truth to the statement. The market is getting hotter again and there is a slight rush to secure land and lock in unit prices by local and foreign buyers. As mentioned supply of higher quality properties meeting our discerning client’s expectations is a daily challenge. I love the part of my job where I am an active agent playing a role in the viewings! Sales is in my blood – I love the excitement of the viewing as you never know which one will lead to successful closure. The twists and turns of this business are severe but ensure life is never boring. I love sharing the excitement of my clients and assisting with making such important decision such as buying or the selling a property. These are life changing moments. It can be also a stressful moment in client’s life however is also very enjoyable one whether a couple buying their first home or a holiday home for a somebody looking for place in sun. One of the most enjoyable part of my job is also acting as a buyer’s agent – where clients appoint our company exclusively to find them their dream property. This is where we become more private investigator than real estate agent – a strong sense of ‘connected thinking’ is required and many times after days of phone calls, the connection to the perfect property by a very private seller can be secured. Bringing together a proud property owner and a trophy seeking buyer at the very top end of the market is the greatest pleasure in the role.
Also much of our work is done ‘off market’ – where properties are not advertised and buyers are private clients from our data base list. This is the most enjoyable segment of the business.
Is it harder or easier for women in real estate business?
I would say easier, unlike some other sector, woman seem to have more of the skills that are needed for this type of business. With their tact and desire to please, women are more relationship-oriented, more nurturing, more patient and more sensitive to the clients’ needs. Also women are better at balancing work and family and are better in multitasking, which is a critical asset in real estate because of its demanding nature.
Since the establishment, Dream Estates Croatia & Montenegro have been an exclusive representatives of Savills UK, one of the global real estate leaders. Is there a difference in a way of doing business here and in major European centres, such as London?
We are delighted with our 12-year relationship with Savills. Savills have brought so much value and knowledge to business over the years and provide a sign of trust and expertise to our clients. Their 700 offices worldwide and 30,000 employees provides a wonderful global view to our local business. Our consultancy arm, Real Estate Intelligence, provides a winning edge to our developer and resort clients on The Adriatic whom we advise on market trends, product design, master planning and general development consultancy.
Savills have over 40% market share of the Central London market so you can imagine the volumes being transacted. In major European centres, sales are structured simply and paperwork is orderly. Here, we have a long way to go to streamline the sales paperwork process and the property paperwork in general. So the sales are more cumbersome and slow here and need tremendous attention to detail to protect the clients.
You cover the entire Croatian market – what regions are the most attractive to foreign purchasers? What are the differences between Croatian property markets, such as Istria, Split area, Dubrovnik, Zagreb, etc.?
Dubrovnik is the first market to show strong signs of recovery and has traditionally attracted the highest prices in Croatia. Dubrovnik, especially Old town of Dubrovnik, also returns the best rental yields due to high average daily rates and increases in visitor numbers annually. With the combination of ongoing growth in Dubrovnik in price and improving yields, Dubrovnik would be a wise investment choice but also offers a wonderful lifestyle – but those considering to purchase in Dubrovnik should do so, sooner rather than later. We would expect transaction rates in Split and Istria to improve this year, and everything being equal, we would also expect these 2 markets to rebound over the next 36 months and start to deliver price appreciation finally once again commencing in the 2nd half of 2017.
What are the potential buyers most attracted to when they’re looking to purchase the property in Croatia?
In Dubrovnik, for foreign buyers, there is a significant emotional draw to the purchase. Many of our clients have holidayed here for years and want to have a property here to enjoy, grow in value and maybe even rent when not in use. The Dubrovnik lifestyle is unique and we are very fortunate to live in one of the best cities in the world and foreigners increasingly recognise this also. The beauty of nature, Stari Grad, the sea, islands, our great food, low to non-existent crime rates and low cost of living – these are declining assets in many parts of the world and we have them all here in Dubrovnik, in the palm of our hands – In most other regions, investment is the main driver with some holiday usage although Istria also attracts a significant number of ‘drive to’ buyers who select Istria also for its wonderful lifestyle.
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