Real estate price dynamics
Housing prices in Montenegro continue to grow rapidly, despite the stabilization of demand, a decrease in activity in housing construction and the recent introduction of a progressive real estate tax.During the year to the 2nd quarter of 2024, the average price of new housing increased by 21.4% (16.6% adjusted for inflation) to 1,821 euros per sq. m. Annual growth in previous quarters: +30.95% in the 1st quarter of 2024, +27.95% in the 4th quarter of 2023, +24.56% in the 3rd quarter of 2023, +9.09% in the 2nd quarter of 2023 and +6.01% in the 1st quarter of 2023. These are the data of the Statistical Office of Montenegro.
In the coastal region, where the most expensive housing in the country is located, in the 2nd quarter of 2024, the average cost per square meter was 2,107 euros, which is 49.1% more than in the previous year, and is the highest in recent times.Foreign investments
In 2023, foreign investment in real estate in Montenegro amounted to about 463 million euros, which is 3% more than in the previous year.However, FDI inflows into the country's real estate sector have slowed this year due to the recent introduction of a progressive real estate tax.After the restrictions imposed due to the pandemic were lifted, the tourist flow to Montenegro, as well as the demand for coastal real estate, began to rise again. In 2022, the number of tourists increased by 30.7%, in 2023 by 19.7%, reaching the level of 2019.
However, tourism seems to have stabilized this year.In the first nine months of 2024, the number of foreign tourists visiting Montenegro reached 1,102,982 people, which is 0.9% more than in the same period last year.
The largest investors in Montenegro's real estate in 2023 were Serbs, who spent a total of 78 million euros. Russians, who invested about 56 million euros in Montenegrin houses and apartments, are in second place. Last year, Russian citizens accounted for about 29% of the total foreign investment in real estate in the country.
This is followed by investors from Germany and Turkey (51 million euros each), the United States (34 million euros), Ukraine (15 million euros), Switzerland (13 million euros) and the United Arab Emirates (13 million euros).
Before the sanctions were imposed, Russians were in 1st place among international home buyers in Montenegro.It is estimated that between 2005 and 2010, Russian citizens purchased about 100,000 properties in this country.
Most Russians buy or rent real estate in the coastal towns of Bar, Herceg Novi, Petrovac and Budva.These coastal towns were popular among Russians in previous years, they have Russian communities, brokers say.One of the advantages of buying a home in Montenegro is the opportunity to obtain a residence permit in the country. The law adopted in 2015 allows foreigners buying real estate to obtain a residence permit. The cost of the object can be any.
Source: Global Property Guide
