The broad-ranging geography stretches from the far eastern edges of the Alps in the north west to the Pannonian lowlands and the banks of the Danube in the east; its central region is covered by the Dinara mountain range; and to the south it extends to the Adriatic Sea. Croatia has three distinct climate zones: the climate in the country's interior is moderately rainy; on the peaks of the mountain ranges there is a forest climate with snowfall, while the areas along the Adriatic coast have a Mediterranean climate with many sunny days annually. The area around popular Dubrovnik is warmed by the mild climate of the southern Mediterranean and nearby there is a relatively small but varied coastline ranging from rocky, steep shorelines, to sandy beaches and tall hills rising from the water's edge.

The island of Brac, near the city of Split, has a frequent, speedy ferry service connecting it to the mainland which is gradually making it a suburb of the city. Split itself holds plenty of cultural appeal – including centuries of history on show in the third century city of Trogir (a UNESCO World Heritage site). Elsewhere, Hvar, recognised as one of the world's most beautiful islands, is one of the most enchanting Dalmatian destinations with pebble beaches surrounded by pine forests and several natural sandy beaches on the north side of the island.
 
Although the Croatian property sector is reasonably well developed – which has occurred in line with its tourist market – land and house prices are still very favourable in comparison with other traditional European hotspots such as Spain. "Croatian property offers very good value for money," says Liliane Scully of Adriatic Riviera. "When this is coupled with a safe environment, low cost of living, a Mediterranean climate, EU membership pending in 2010, many spectacular sea views and landscapes and friendly people – things seem to bode well for potential investment."

Dalmatian island properties, particularly traditional Croatian stone houses, offer good investment potential, as does real estate in historic towns. Scully continues: "Investment hotspots in Croatia include Dubrovnik in the south, the Dalmatian coast including the islands of Hvar and Brac, the capital Zagreb – for longterm buy to let property – and last but not least Istria located in the north west – which is the most accessible part of Croatia from Western Europe."

Tourism is a major source of income for Croatia, especially during the summer. Over ten million foreign tourists flocked to the country in 2006, generating a revenue of around seven billion euros. The country has been ranked as the 18th most popular tourist destination in the world, which is an amazing rise following the end of internal conflict that plagued the recent history of this beautiful land. What Croatia has lacked previously with the tourist trade, however, is the range of activities offered by its more developed rivals. "The holiday rental market is growing at a fast pace," says Scully. "This is particularly the case along the coastal areas. "While the rental tourist season has been quite short up to now – from six to 12 weeks – the introduction of golf courses and the development of tourist activities planned over the next two to five years should see a huge increase in this market, as has happened in other parts of Europe."

Peter Ellis of Croatia Property Services thinks pre-entry to the EU is the ideal time to buy into the market. "EU entry has caused rapid price increases for all the new EU countries. Initial investors were pathfinders but once EU membership was ratified, more cautious investors poured in as EU membership gave them confidence. The period when the rises were greatest was that between membership being confirmed and actually joining. As Croatia is joining in early 2010, the next two years are likely to see strong growth in capital values in the country." Ellis identifies Istria as the place to buy for the best returns in future years. "Prices in Istria are, on average, around 1,800 euros to 2,300 euros per square metre, whereas down in Dubrovnik they have been hitting 7,000 euros per square metre. They are effectively topping out down there until the market catches up – rental yields in Dubrovnik aren't three times the ones in Istria."

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The Dalmatian island of Brac

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Article published 23 April 2008