CROATIA: Irish investors are flooding into Dubrovnik. The local papers all carry advertisements for "Irska" estate agents. What they mean is that they're Croatian agents with Irish clients and would you like to sell your house to them? Anyone owning a house in the area regularly gets fliers through their letter boxes begging them to sell, Bridget Hourican reports
Dubrovnik, "the pearl of the Adriatic", has been a favourite Mediterranean destination for centuries. During the 1980s (when property outside cities could be privately owned - Yugoslavia unlike the Soviet bloc had something of a market economy), Dubrovnik real estate was going at a hefty 4,000 Deutschemarks per square metre.
Then came what a Croatian tourist guide described to me shortly as "the gap of the war". The whole of the 1990s was a write-off - although Croatia's part in the war ended with the Dayton Accord in 1995, the tourist recovery was delayed by NATO bombing Serbia in 1999. Croatia's independence had been recognised in 1992 but western investors weren't making the distinction.
So it's only in the past three years that Dubrovnik has been making up for the "gap of the war". Tourists are coming back and so are property investors, and for the past two years this small area has seen one of the world's greatest property booms.
In 2001 prices in the "Old Town" were €1,000 per square metre, today they're at least €5,000 per square metre and I met two people whose houses just outside the Old Town have gone up more than sevenfold in three years. The Irish and British are driving the boom, said Franjo Marijanovic of Dubrovnik Real Estate.
"I get a few Irish making inquiries every day." When I walk into his office there's an Irishman sitting there, Gary O'Callaghan from Cork, but living in Croatia since 1996. He's among the smart or lucky ones who bought a few years ago. He tells me I just missed another Irish buyer.
It's a seller's market which explains the phenomenal prices - and the desperation of some estate agents. Being an old hand, O'Callaghan is regularly called upon to help "friends of friends of friends" from Cork. The last Cork people he met were going home angry and disappointed after being shown the same site at different prices by different agents claiming to have an exclusive right to it.
He acquired his own house after "horrendous legal problems" because it was owned by three different sets of relatives. This is common in Croatia and is something buyers have to be aware of.
Marijanovic sorted out these problems - which is why they're still good friends and O'Callaghan is chatting in his office - but where an agent hasn't the right to act for all the relatives, things can go wrong.
Some Irish and British in Dubrovnik are buying holiday houses, many are investing. Marijanovic says prices will keep on rising. They're already at central London prices, but it's true that Dubrovnik is unique. After the Irish and British, the next biggest buyers are the French. To Croatians' amazement, French people are selling their properties all along the Cote d'Azur in order to buy in Dubrovnik.
The Old Town, encased in its medieval walls, dates from the thirteenth century, but was mostly rebuilt after the 1667 earthquake. It's been carefully restored since the 1991-2 bombardment by Serb and Montenegrin forces and is one of the most beautiful towns in the world. It only has 5,000 apartments. Most of these have been sold off.
Today Marijanovic has only 20 apartments to sell in the Old Town. So, can ask what he wants for them? "Yes, more or less." The climate is Mediterranean, but balmy French Mediterranean not blistering Greek and Spanish Mediterranean; the water is clear to 30 feet; there are a number of harbours for yachts. Strict regulations determine where and how you can build - everyone tells me "we don't want to go down the Spanish road" - so there are only four high-rises in the whole area. The rest are small villas, nestling in the hills, and not too many of them. All of which makes this the perfect destination for the international jet set. Zrinka Jelavic of Adriatic Luxury Hotels, shows me the celebrity photographs, Rio Ferdinand, Holly Valence, Roger Moore, the Sultan of Brunei - who arrived in an enormous yacht, his wives on another, his servants on a third. Adriatic Luxury Hotels is owned by Goran Strok, a Croatian living in London. He bought one hotel in the 1990s "because he had faith in Dubrovnik's recovery". Now he owns five, all five star. They get "lots of Irish clients," and lots of them want to buy here," says Jelavic.
Croatians say: "The Irish are like us" - small country, Catholic, with a history of oppression (which always stands Ireland in such good stead among the nations of the earth). But these reasons seem a bit vague.
Croatia seems a safe bet. It's been quiet since 1995 and a few months ago it was accepted as an EU candidate country. But it's true that we have something of a "special relationship" - with this particular Croatian government anyway.
The governing party, HDZ got in last November - on their own and everyone else's admission - because of a brilliant election campaign masterminded by P.J. Mara. So impressed and grateful was Ivo Sanader, head of HDZ and now prime minister, that he retained Mara as adviser on EU affairs. This was a smart move since Ireland had the presidency until July and it was during this presidency that Croatia's candidacy for the EU was accepted.
What development opportunities there are in Dubrovnik - and aside from holiday homes there aren't too many in this small, non-industrialised beauty spot - the Irish seem to be grabbing. The talk on the street is that a multi-storey car-park and a marina - offered for development to a French company in 1985 but then shelved because of the war - has recently been offered to an Irish company, or companies.
What do the Croatians make of this influx of foreign buyers? The Old Town is seeing one of the fastest changes in ownership in world history - from Croatian working class to international millionaires in three years. In Tito's Yugoslavia, the middle classes found the Old City too hot, too high, too cramped, too difficult (because no cars are allowed in) and left it to the working class. The 1991-2 bombardments failed to dislodge them, but money has done it.
Antonjeta Nives Milos from the tourist office says the exodus of Croatians from the Old Town is a major concern: "It will be a lively city in the summer, but in winter it will be dead." She's careful to say she wouldn't mind foreigners buying if they would live here year round, but they don't.
O'Callaghan confirms that he's the only Irish regular in Dubrovnik. There is of course an Irish pub, but it's owned and staffed by Croatians.
I get the impression Milos's job is clashing with her heart. She's glad the tourists are back and glad of foreign money, but "my daughters grew up in the Old Town".
She finds the lack of children during the winter very sad. "It's a ghost town." The mayor is concerned enough to be offering incentives for families with young children to settle here, but can these incentives match the London prices foreigners are prepared to pay? Today when you walk the city walls you still see the washing flapping from lines and the old women with their shopping nimbly scrambling down the steep steps.
This is what makes it more charming than Venice, which in layout it somewhat resembles. Says Nives: "The city of Dubrovnik is the people of Dubrovnik." Then the refrain: "But you can't stop progress."
Progress will probably soon reach saturation point in Dubrovnik. Investors are already starting to move along the Dalmatian coast on to the islands. Croatia has over 1,000 islands, only 66 of them inhabited.
The tourist brochure cheerfully proclaims: "There's bound to be one to suit you. Perhaps with your own lighthouse. Swim in a bay of your own, without neighbours, without witnesses." An island in the middle of Dubrovnik has been on sale for the past few years for €3 million. It was the site of a second World War massacre which may be putting investors off. But there are always other islands: 1,184 of them.