engleski

Features and Impact of Foreign Demand on Real Estate Market: The Case of Croatia

The aim of this paper is to clarify the role of foreign demand on the specific, geographically limited real estate market of islands. Namely, in the last decade the Croatian islands have become extremely popular among foreigners and they have become an important factor in the creation of demand for real estate and consequently the market price. Their effects are manifested in two ways. After financial liberalization the number of foreign investors in second homes on Croatian islands increased rapidly. At the same time, the number of foreign tourist visits increased greatly and therefore profitability of investment in touristic real estate become high. All of that resulted in a rapid increase in real estate prices on islands. That changed traditional life on Croatian islands. Therefore, we conducted primary and secondary research with the aim of capturing the features and impacts on real estate markets that foreigners have brought to the island economy. The results show that foreigners have brought a positive effect on the local economy. However, indirectly these changes have brought negative effects on the traditional way of life on Croatian islands.

Foreign investors, real estate prices, tourism, island economy

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