Montenegro: current situation in the real estate market

Briefly about the main thing

Montenegro is a mild climate, clean healing air, high green mountains, crystal turquoise sea, friendly locals… This is an opportunity to finally «slow down», enjoying simple things – the beauty of nature, a cup of fragrant coffee, birdsong, the sound of the surf.

The Montenegrin real estate market is similar to the lifestyle of the state: It is characterized by a combination of traditional Mediterranean architecture and the openness of modern investors to new ideas and concepts. Fantastic restoration projects of ancient stone manors, modern residential complexes with comfortable apartments, high-class resort complexes of mixed use, housing in which can be used as a hotel fund or for personal use by owners - these are, perhaps, the main differences of the Montenegrin real estate market from other Balkan countries.

 

The main thing that both people permanently residing in Montenegro and real estate market specialists pay attention to is that, regardless of the publications in the Russian media that have been saturated in recent months, there have been no negative changes in the country. The sun is still shining here, the sea is still shining with azure, the infrastructure is also developing. Montenegro retains the position of a state beloved by international tourists and comfortable for moving to permanent residence.

Current situation in the real estate market

Montenegro traditionally attracts home buyers with the splendor of its nature, rich history, well-preserved ancient Mediterranean towns and a developing real estate market, where there are more and more really high-quality objects. At the same time, developers take into account the fact that, on average, the budgets of real estate buyers have decreased, and therefore they offer apartments of a smaller area and at more affordable prices. High-category facilities are also being built in Montenegro, high budgets are being invested in infrastructure development. In general, the quality of facilities and their rental potential are improving.

At the end of 2015, a law was adopted in Montenegro that allows for the purchase of real estate of any value to obtain an annual residence permit on the territory of the country, with the possibility of its further extension. Unlike expensive "golden visas", the cost amounts are an order of magnitude lower, since a quite decent "family" apartment in Montenegro can be bought for "euro;80,000. Experts note that many Russian buyers resort to such an opportunity, but in general, so far the program has not caused the excitement that the country's authorities expected. It is worth noting that obtaining a residence permit may be of interest to those buyers who plan to stay permanently on the territory of Montenegro, since when leaving the country for more than one month or more than three months with the notification of the internal affairs bodies of Montenegro, the residence permit is canceled.

Currently, there is a change in the profile of the buyer of real estate in Montenegro – investments for the purpose of renting out housing and generating income are gaining more and more popularity. The national composition of buyers is also gradually changing. In addition to representatives of Western Europe and Russians, buyers from Turkey and the Middle East have appeared on the market over the past year.

The most attractive regions to buy

Before you start choosing a region for buying real estate in Montenegro, it is worth determining the purposes for which housing is purchased. As a "second home" and moving to permanent residence, cities with a developed year-round infrastructure are suitable, as an investment in order to generate income, resorts and historical centers of settlements.

Tourism is one of the leading sectors of Montenegro's economy. Therefore, the purchase of apartments or villas for rent is a logical choice for an investor. And, although the entire coast of the country is popular with tourists, it is still worth getting a better understanding of the regions. The most popular are Budva and the Budva Riviera, which includes Becici, Rafailovici and Petrovac. Tourists are attracted by the open sea, beautiful beaches, developed infrastructure and nightlife. They are also Old Towns and historical centers (in Budva, Herceg Novi, Kotor, Becici). Foreigners visit them all year round, regardless of the season and weather, etc. In Becici, the authentic fishing village of Rafailovichi should be especially noted.

The Bay of Kotor is extremely popular for both classic beach and sightseeing holidays. Thanks to cruise tourism, Kotor is attractive to tourists, while apartment prices in its Old Town are significantly lower than in neighboring Dubrovnik, and the popularity of the place is steadily growing, which makes real estate here interesting from the point of view of investment. In addition, in the Bay of Kotor there are three largest residential projects in Montenegro - Porto Montenegro in Tivat, Portonovi in Kumbor, Herceg Novi, as well as the tourist complex Lustica Bay on the Lustica peninsula.

The Bar Riviera is another traditionally popular beach destination, but, unlike Budva and Kotor, it is a more budget option both in terms of the size of investments and in terms of income received.

For permanent residence, cities are first of all comfortable, although lovers of quieter places can also turn to resort destinations. For example, a Bar will provide all the necessary infrastructure for life in its usual Russian sense. The city has well-developed healthcare, there are excellent medical centers, several schools, and a modern sports complex. The bar is sparsely built up – and in the near future will not be built up at such a pace as Budva. In addition to the Bar, anyone who is thinking of moving to Montenegro should consider Podgorica, Herceg Novi, Igalo, Budva and Tivat. For permanent residence, comfort, opportunities for interesting pastime and entertainment are absolutely necessary. These famous Montenegrin destinations fully provide them to their permanent residents.

The subtleties of buying

The main advice that experts give to future owners of real estate in Montenegro is to turn exclusively to proven developers and agencies with a serious portfolio and extensive experience in the market. Professional development companies are, first of all, successful, commissioned, populated residential complexes with developed infrastructure, information on which is publicly available. Proven developers value their reputation very much and treat projects that meet the highest standards of construction with full responsibility. They will be happy to show the objects and provide all the necessary documentation for them. It is very important to come to the country and choose your own accommodation!

Primary housing, as in many other countries, in Montenegro today enjoys more active demand from buyers. The exceptions are Old Cities and historical centers of settlements, where secondary objects are also valued. Today, foreigners often independently buy apartments from developers. In order for the transaction to be successful, it is necessary to enlist the help of a professional notary and a good translator. During the conclusion of the contract, the notary will provide the buyer with all available information on the object, possible risks, the presence or absence of necessary documents and the consequences that this may entail. A translator who knows the law will explain everything to the buyer in a clear language and he will be able to make a purchase decision.

If we are talking about "secondary", then experts recommend paying attention to the old stone houses under restoration, the end result is truly impressive, and the objects themselves keep history, unique warmth and comfort.  

As for transactions with land plots or houses located on them, here in Montenegro the situation is more complicated – and you definitely cannot do without the help of a professional realtor. A few years ago, a new law on construction was adopted in Montenegro, strictly regulating its quality standards. After the adoption of this law, representatives of the sector try to strictly comply with these standards, and most of the facilities built over the past three or four years are structurally high-quality, and their cost depends on the level of finishing and materials used. But it should be borne in mind that housing commissioned in 2006-2007 and earlier was often built without compliance with quality standards, thereforeits acquisition may be associated with risks. Everything concerning the quality of the object, property rights, as well as working documentation, construction permits, payment of utilities by the previous owners, the presence of "unexpected" heirs" must be carefully checked, and a professional real estate agency will help to do this.

Making a deal

In general, the procedure for acquiring real estate in Montenegro is simple and understandable, and is the same for both citizens of Montenegro and foreigners. After selecting an object, it is necessary to leave a deposit with the agency (unless otherwise agreed), guaranteeing that during the drafting and discussion of the contract, the seller will not sell the selected object to another buyer. The deposit is part of the price of the purchased object. After agreeing on the contract, the parties sign it in the presence of a notary, and in due time the buyer transfers the final amount to the seller's account, and within about a month becomes the rightful owner of the property. It is strongly recommended to contact an independent lawyer with a license to practice in Montenegro. The lawyer will represent the interests of the seller, conduct a preliminary check of the documents, on the basis of which he will either approve the transaction, or, in case of defects, suggest steps to eliminate them, or recommend canceling it altogether. He will also draw up a contract taking into account the interests of the buyer, submit all the necessary documents for the registration of real estate in the cadastre.

It is worth paying attention to the fact that, according to the law of Montenegro, all expenses for the purchase of real estate are borne by the buyer.

Prices

Experts note that in recent years, the real estate market in Montenegro has become more civilized, and prices have approached the most realistic. In areas where large resort complexes of high category are being built, prices have remained stable. Nevertheless, buyers' budgets have decreased, so developers are more open to negotiations, installments and different payment methods. During the construction of new facilities, developers, taking into account the current situation on the market, plan apartments of a smaller area, which brings its cost closer to the wallets of buyers. Prices for objects located in less attractive locations, as well as for objects of low quality, have fallen more noticeably.

The most popular are objects priced from €100,000 to €200,000, apartments with one or two bedrooms, with good rental potential. Among luxury properties worth €1-1.5 million, the villas on the first line are popular.

As for the average cost per square meter, the situation is as follows.

Prices on the Budva Riviera have normalized, approaching how much residential properties cost in reality. The cost per square meter in a medium-level facility varies from 1600 / 1 sq. m. m to €2000 / sq. m, and in higher-level facilities, with high-quality finishes, smart home system, in an attractive area – from €1900 to €3500 / 1 sq.m.

In the Bay of Kotor, the average price per square meter is higher, in particular due to the presence of such giants as Porto Montenegro, Lustica Bay and Portonovi. The cost per square meter in a medium-level facility varies from €2100 to €2200 / 1 sq. m, and in higher-level facilities – from €2000 to €2500 / 1 sq. m. In large premium complexes, the cost of «square; starts from €6000. The most expensive housing in Bokokotorsky Bay, as well as in Budva, is located in the Dukley Gardens complex.

The most budget options can be found on the Barskaya Riviera. The cost of housing here has not changed much in several years and remained stable after the crisis, there was only a slight decrease in prices on the secondary apartment market, but in general they were not overpriced. Secondary objects are sold here on average from €700 to €1800 per square meter. «Luxury» objects in the center can reach the cost of €2500 / 1 sq. m. As for new housing, when buying it, you should expect to spend from €1500 to €1800 per «square ». Approximately the same rates exist in another popular direction – Igalo.

As for the famous resort of Herceg Novi, so beloved by Russians, on average real estate here is more expensive than in Budva. This is due to the high density of development and the actual absence of new sites. At the same time, the areas that are above the central highway turn out to be cheaper: here real estate can be purchased for €1500-1800 per square meter.

Portal HomesOverseas.ru thanks Dilara Maric for her help in preparing the article (Dream Estates Montenegro) and Alain Smyukha (Eurodom MNE).