Croatia’s charming island villages are being renewed after centuries of decline

In the 11th century, when Dubrovnik was part of the Byzantine Empire, 11,000 people lived on the nearby island of Sipan, locals say. Now there are fewer than 500 but new property developments are set to rejuvinate an area ripe for investment.

'It took us a thousand years to rediscover it,' says Igor Tomljenovic, the project manager for Braemore, a Nottingham-based developer which is building apartments on the six-mile-long island.

For property owners on islands the problem usually is getting there. Croatia's islands, however, are genuinely accessible. It has 1,000 islands hugging its coast, 47 of them inhabited and almost all visible from the Adriatic shore.

If you owned a property on Sipan, you could be there in four hours from the UK. A two-hour flight to Dubrovnik, a cab ride to the port, then a 40 minute trip by high-speed catamaran, costing just £2 (or an hour by rustbucket ferry) and you're on your island. Better still would be to arrive in your own yacht.

Eight miles away, Dubrovnik is thronged with visitors from up to nine cruise ships a day. But on Sipan, peace reigns. For those interested in renovation there are around 40 former summer residences of aristocratic Dubrovnik families, mostly ruined.

Certainly the islands have potential. In 2011 Croatia is set to become the second part of the former Yugoslavia to join the European Union (after Slovenia). Even under communism, Croatia was a major tourist destination, and although the war with Serbia and Montenegro in 1991-95 left it in ruins, it has rallied under the slogan 'the Mediterranean as it once was'.

The World Travel & Tourism Council predicts that Croatia will be one of the five fastest-growing destinations in the next decade. Prices on the coast have risen by 13 per cent in a year, according to Colliers International.

The site at the village of Sipanska Luka is well chosen, on a bay so enclosed that it has the air of an Italian lake. The 14 apartments, in five waterfront buildings, will have a view of the little fishing boats bringing squid and octopus to the bayside restaurants and cafés.

The response from the 270 villagers has been positive. 'It is going to bring jobs into the economy, after the depopulation of the island over the past 30 years,' said Braemore's MD Oliver Wheatcroft.

Foreign buyers have to get permission from the Ministry of Justice to buy, which can take two years. However, if a buyer sets up a Croatian company, at a cost of £500, it avoids the need to apply for permission (and has tax advantages when letting or selling).