This article is taken from Country Life International Spring 2014, out this week with Country Life magazine.

The property market in Dubrovnik

Fashionable Croatia continues to grow in popularity every year and the late-medieval city of Dubrovnik is located at its southern end where it tapers into Montenegro. It’s a micro-market that peaked at heady levels in 2007, especially for historic houses within the walls of the UNESCO listed Old Town, before the downturn hit hard.

But price falls of 30%-40% and an easier buying process-with efforts towards transparency- both tied in with EU membership in 2013 are attracting renewed interest. A long-proposed new development with several golf courses seems to be finally going ahead.

Who buys?

Croatia tends to attract lifestyle buyers-the investment side is quiet-with property hunters made up of mainly British and Irish buyers as well as Croatian expatriates, plus a few Americans, Belgians and the inevitable Russians in recent times. Croatia has relaxed its property laws for EU buyers and, since July 2013, those owners can rent out their homes on the same basis as the Croatians.

Plenty of character

Properties in the atmospheric Old Town come up for sale very rarely and command a premium.

Renovation projects can still be found-a nicely restored four-bedroom town house might cost about €1.2 million. Savills have a waterfront villa in exclusive Lozica, with scope for eight bedrooms at £2,257,750. Ploce, just south of the Old Town, is popular for apartments (from €2,700 per square metre, unrenovated), but the most sought-after, if tiny, area is Sveti Jakov. Also in the south is the wonderfully unspoilt coastal town of Cavtat (a detached two-bedroom Dalmatian stone house in its Old Town costs about €500,000) and the neighbouring area of Konavle is popular for its cypress woods and hillside villages.

Further out of town

Just north of Dubrovnik is Lozica, where you might buy an eight-bedroom villa with direct water access and in need of refurbishment for €2.75 million; there are similar opportunities in Zaton and Stikovica. For elevated homes with sea views, look to Brsecine and Trsteno or there are turnkey apartments at the well-established fivestar resort of Dubrovnik Sun Gardens (www.dubrovniksungardens.com) from €250,000.

Two of 1,000 islands

A short water taxi away are several idyllic islands that attract both yachties and day trippers yet can offer the sort of tranquil evenings that the swarming Old Town never can. Sipan and car-free Lopud are popular; the latter has sandy beaches, scarce for this region, and Savills have a five-bedroom villa there for €499,000.

The best estate agents for buying property in Dubrovnik

Croatian-born Jelena Cvjetkovic of Savills International (020-7016 3740; www.savills.com/ international) is a great source of local knowledge and the Croatian market. Split-based Tim Coulson of First Property Croatia (00 385 91 480 26 28; www.firstpropertycroatia.com) also covers Dubrovnik.

Where to eat in Dubrovnik

With two panoramic terraces and starched formality, Nautika by the Pile Gate is the standout best in town (www.nautikarestaurant.com), although from the same family-and famed for fish dishes- is Proto (www.esculparestaurants.com), also in the Old Town. Another couple of Dubrovnik institutions worth trying are the Tovjerna Sesame (www. sesame.hr) for the risotto with sea truffles or head out of town to Lapad for Orsan’s Dalmatian dishes beneath shady pine trees (www.restaurant-orsandubrovnik.com).

What else to do?

A guided tour or a walk along the city walls looking down on the medieval rooftops, followed by a passeggiata down the central spine, Stradun, top a long list of must-dos. These should be followed by an aperitif at one of the Old Town’s eclectic array of cafe-bars, such as Buza, hewn out of the city walls, or sip a cocktail and yacht-watch on Cavtat’s waterfront. Cultural offerings also abound: Croatia does musical festivals and summer theatre especially well, and you can also choose from an array of monasteries, palaces, a modern art gallery and a maritime museum.

Yachting heaven

Don’t forget those islands, whether by taxi-boat or your own craft: pine-covered and protected Lokrum or the 13 isles of the Elafiti archipelago, including Lopud and Sipan (see above). Or if all that’s not enough, beautiful Montenegro is a short drive- or sail-across the border.

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