One of the industries that has been experiencing a real boom in the last few years is certainly the demand for luxury real estate in Croatia. Not only because of the holiday, but as a destination that is suitable for a longer stay, both because of its climate, tourism development, way of life and culture, security and because of the good connection with the whole of Europe. Tourism is much more than just counting overnight stays, and it connects various industries vertically and horizontally, and thus directly affects the development of tourist destinations. If you are wondering what it takes to make your property part of Croatia Sotheby’s International Realty offer, the answer is not a priori in the price of the property. “We started the rental service at the end of 2018 and we are very proud of that. The Sotheby’s International Realty® brand itself, in addition to real estate for sale, also offers real estate for tourist or year-round rental, so the introduction of the luxury real estate rental service is a logical sequence of business development in Croatia. Taking into account the growing tourist development of Croatia and the fact that it is becoming a popular world destination and an attractive destination for travelers with top requirements, there is definitely a need for accommodation facilities of the highest rank. The focus is on real estate that meets the highest standards, ie on facilities that stand out as unique and superior in every respect, given the location, standards of architecture, design, decoration and first-class service. At the moment, apart from renting and mediating in the sale of accommodation capacities and consulting, we do not provide other services such as complete management or maintenance of real estate, but we are definitely planning further development in this direction.”Concludes Pažanin. On the contrary, there are more and more inquiries from foreign clients for the purchase of luxury real estate in Croatia, but he warns of the question of prices, which in his opinion should not increase. “In 2019, in my opinion, the trend of growing interest and demand from foreign clients will continue. We still have unknown and unexplored locations that are unique in this part of Europe. Prices are rising and will continue to rise, which is not very good because they are already quite high.” On the one hand, we have attractive locations, but also a segment without which the whole job is impossible and which is extremely important, and that is a complete story, ie professional support from quality architectural offices, designers, as well as the construction sector that follows all requirements and is able to realize all imagine an investor. So the location is still one of the first motives for buying, which is logical, but according to Pažanin, there is also a demand for facilities for renovation. “The most sought after are ready-made luxury villas in the first row by the sea and plots of land also in the first row by the sea. In addition to this, the demand for renovation facilities in the same locations should also be highlighted. Always attractive areas are the islands, especially Hvar and Brac, then Split, Dubrovnik and Opatija. Istria is a very desirable region and we also have a large selection of real estate there, as well as in the Kvarner area, which I consider extremely attractive. There is Villa Castello, which we sold in 2017 for a record amount of € 8.115.000. “Says Pažanin and emphasizes that the entire area of Istria and Kvarner is interesting because of the long tradition of tourism. In a conversation with my partner and director at Croatia Sotheby’s International Realty, Marko Pažanin, I tried to scratch a little below the surface and see how the market is developing, what are our advantages and disadvantages and what luxury real estate buyers expect and demand in our real estate market. When we talk about the administration in Croatia, especially in obtaining various permits, it is dark for everyone, let alone for foreign investors who come from relatively well-organized markets. As Pažanin pointed out in the introduction, that Croatia has not yet established itself as a luxury real estate market and that very little is being done about it, and as in any business, it is important to focus and know what we want. There is the issue of brand, positioning as well as long-term vision of which customer profile we want to attract. And if we know that tourism is associated with many other industries (the potential to open business cooperation through other industries), it should be important for us to know what profile of customers we want to attract, and accordingly position ourselves. And according to the analysis of the company Sotheby’s International Realty Croatia, the demand for luxury real estate in Croatia during 2018 increased by as much as 25 to 30 percent, and their prices by 10 to 15 percent. Finally, one interesting fact. At the end of last year, Croatia Sotheby’s International Realty entered the luxury real estate rental segment. And they plan to offer complete real estate management services, which is certainly a smart move, at least when we talk about foreign investors who bought or built a luxury property in Croatia, and do not have time to deal with it until they stay in it. Guests looking for luxury can not impress with luxury, because they have traveled the world and top luxury destinations, and luxury is understood, ie the level of accommodation and service at a high level, but can we find our niche in authenticity, culture, gastronomy and through the development of special content? Pažanin believes that this is exactly the segment on which we must build our path to a luxury destination. Marko Pažanin: All indicators indicate that the era of mass tourism is behind us and that today’s tourists are looking for experience Photo: Croatia Sotheby’s International Realty Photo: Croatia Sotheby’s International Realty Often, various investors give up the investment for that very reason. And this is confirmed by Pažanin, who points out that many investors are repulsed by the slow bureaucracy and generally unfavorable investment climate. “Many investors are put off by slow bureaucracy and a generally unfavorable investment climate, so it is necessary to analyze and eliminate factors that slow down the attraction of foreign investment. In addition, one of the main challenges is certainly the extension of the tourist season, ie the systematic encouragement of the development of tourist products that enable year-round tourist traffic. Croatia has great potential to ensure an excellent position in the luxury market, and what we as a destination still lack is the entry of well-known hotel brands in our market that will contribute to the recognition of Croatia in the global tourism market, but also attract greater individual investment.” Although there has been talk for years about the interest of global tourist brands in Croatia, everything is still slow and without a large arrival of global brands in Croatia. According to the data provided by the Ministry of Tourism, in 2019, around one billion and 50 million euros will be invested in Croatian tourism, while investments in 2018 amounted to 940 million euros. In doing so, the companies will invest around 626 million euros in their tourism projects, and the announced investments in the private sector include investments in hotels, camps, nautical and other types of accommodation facilities, facilities and attractions. “Our country follows all world trends when it comes to real estate. We have extremely high quality architectural offices and interior designers who know how to make an impressive property and create a story out of it. This is exactly what is in demand – a property that brings a new experience! As for us as a brand, we also keep up with innovations and trends, so we use virtual staging and virtual reality as additional opportunities to view real estate. Customer requirements vary from country to country and from person to person. It is common for everyone to look for a top real estate in an exceptional location, whether it is a villa or an apartment / penthouse. “Says Pažanin, and his predictions for 2019 are positive. Often in Croatia we know how to use the term luxury tourism without even being aware of what it means. The location, the sun and the sea, no matter how attractive they are, are not in themselves enough to talk about luxury tourism. It is important that the offer and content of the entire tourist destination be at that level (from top stores, facilities, services…). We have the great advantage that Sotheby’s Int. Realty brand recognized around the world and we have many quality media partners who give some confidence that the property will be presented to exactly those people who need it. According to the analysis of Croatia Sotheby’s International Realty, most interest in buying real estate in Croatia comes from Eastern and Western Europe, and interest is also growing from the Scandinavian market. “Differences in demand are most often in the quality of real estate: Russians and Chinese want real estate bursting with standards, and Europeans prefer even worse, but they themselves are willing to reconstruct real estate according to their wishes. It is not to be overlooked that wives have the last word when buying villas, so there is no clear “pattern” that could be noticed except their own taste. The most active markets in Eastern Europe are the Czech Republic and Slovakia, Western Europe Austria and Germany and more inquiries from Scandinavian countries. . As for other markets, we have inquiries from the countries of the Far East: China, India and Saudi Arabia.”Pointed out Pažanin. Certainly, the arrival of Croatia Sotheby’s International Realty in Croatia is a positive signal to the global hotel brands that Pažanin mentions as one of the shortcomings. On the other hand, we must be aware that luxury tourism is much more than just a luxury hotel, and that we must work on the strategic development of tourist destinations as well as their positioning as luxury destinations. The answer to the question is how are we not, at least not enough. As Pažanin points out, Croatia has not yet established itself as a luxury real estate market and very little is being done about it. “In addition to everything, we have a noticeable interest of foreign investors and buyers in luxury facilities. We can say that the demand for our market in 2018 increased by 25% compared to 2017, and the number of real estate inquiries within the portfolio of Croatia Sotheby’s International Realty increased by 30%. In order for these inquiries to turn into realization, of course, we need more top real estate. Unfortunately, the situation in our market is such that we lack such real estate. Just as you wrote yourself – location, location, location! It is not enough to have a top real estate in a “worse” location because what our clients are looking for is an experience they do not have in their country, and that is the first row by the sea!”Pažanin points out. Location, location, location – is one of the main rules in real estate business. But is Croatia, as one of the top European tourist destinations, in demand as an attractive destination on the luxury real estate market? Thus, the arrival of the luxury resort of the famous hotel chain Four Seasons in the bay Briženica near the Old Town on the island of Hvar was greeted as a real signal or Break-even for other investors, ie global hotel chains. But again, the whole project got stuck in the administration, and although the opening was planned in 2019, everything is still standing and the construction work has not even started yet. Croatia Sotheby’s International Realty Hotels and restaurants follow the level of service, but destinations unfortunately do not. In Croatia, unfortunately, we do not yet have a real destination for luxury tourism, the only ones on that trail are Dubrovnik and Hvar. All our sales clients can be sure of a high level of professionalism, privacy, quality and timely advice and complete sales management. It often happens that villas are overpriced, and the buyer feels that. Neither can we sell a property for an unrealistic price. In this case, we almost always manage to find an agreement with the owners of the facilities, that is, to get the best offer for both parties. ” But let’s get back to the luxury real estate market and to luxury tourism. The question that goes through my head is: Are we recognized on the global scene as a luxury destination? “The trends observed in the real estate market when we talk about sales are actually reflected in the tourism sector, so we can not say that luxury tourism is among the first associations associated with Croatia. On the global scene, Croatia is not recognized as a luxury destination, although there are isolated environments that are on the trail and follow global tourist trends in all fields. From the level of accommodation and service to the gastronomic scene and the complete tourist offer and infrastructure. In such destinations, as a rule, there are several properties that offer first-class luxury, from the quality of accommodation and service to attractive design and superior decoration, and as there are not too many of them on the market, they achieve significantly higher rental prices. The development of a tourist destination needs to be comprehensively approached and a long-term strategy defined that will enable Croatia’s competitiveness on the global market and ensure an original and recognizable tourist product that will be harmonized with the needs of the market.. ” Pažanin answers the question about the perception of Croatia as a luxury destination and adds that the famous natural beauties and cultural and historical riches of Croatia are not in themselves sufficient to create a tourist identity of the destination, and again on which very little work is done. The properties that Croatia Sotheby’s International Realty has in its portfolio are primarily unique and luxurious, and interestingly, they do not consider luxury to be the price class, but the entire experience. As one of the problems, Pažanin points out that real estate is often overvalued. “All properties have the correct documentation and all the elements that we consider interesting to our clients. The process is really simple and begins with an interview after which the legal team reviews all the documentation. After confirming the correctness of the same property, we include it in our offer and pages. Hvar / Photo: Pixabay.com As a logical continuation of the unraveling of the entire luxury real estate market in Croatia, the question arises whether we follow world standards and market requirements? Are we competitive? What is the perception of the Croatian brand in the luxury real estate segment? Absolutely the greatest interest is in the villas in the first row to the sea and houses and exclusive apartments in the centers of cities such as Split and Dubrovnik., And buyers are usually foreigners. “As you mentioned, to create an original tourist product and a unique image of Croatia as a destination, it is crucial to develop special content given that today’s travelers are increasingly critical, and thanks to general market globalization they are better informed and compare Croatia with similar destinations. Therefore, it is important to offer them something authentic and to differentiate the tourist offer in relation to other Mediterranean countries. After all, all indicators indicate that the era of mass tourism is behind us and that today’s tourists are looking for experience, preferring to choose a meaningful vacation in destinations that offer a diverse and imaginative tourist offer while maintaining authenticity and uniqueness. Croatia has numerous comparative advantages over competing destinations, so there are many opportunities for the development and branding of special content that could, among other things, extend the tourist season. considers Pažanin. When I talk about luxury tourism, I always ask the question: Can we provide the guest with transportation by our helicopter? Or from the airport to the hotel? Then there is silence and silence and the question of how I mean it. Yes, it is a standard service, if we are talking about luxury tourism and we have to take into account the global concept of luxury tourism. Marko Pažanin, Croatia Sotheby’s International Realty: In conclusion, he pointed out that the arrival of Croatia Sotheby’s International Realty two years ago on our market speaks of the importance and brand of Croatia as a tourist destination. And also the arrival of such a global institution gives a signal to other companies that Croatia is a desirable destination for investors. This is an important part of the mosaic when we talk about the Croatian brand, not only through tourism, but in general through the whole range of business opportunities and the arrival of other global brands in Croatia. Villa Castello in Medveja was sold in 2017 for a record amount of € 8.115.000 Photo: Pexels.com Again there is just a focus on luxurious and authentic content, offering and appearing on a unique experience. And yet all this is connected with the development of the luxury real estate market in Croatia.