Montenegro’s Real Estate Market:
2019 Prices and Trends
The Montenegrin real estate market is an interesting market for those who want to move. For now, it offers a combination of low price and the expectation of high earnings in the short, medium and long term.There are a number of factors that have led to the upward trend of property prices in Montenegro. These factors also attract foreign capital and people to Montenegro’s real estate market.This series includes a snapshot of the Montenegrin real estate market in 2019 and predictions of where it will go in the future.
Overview of Factors Affecting Property Prices in Montenegro
The four main factors positively affecting the Montenegrin real estate market are as follows. The support of the country administration on the issue is also significant:
1. Since its independence in 2006, Montenegro has pursued a stable government policy that promotes investment, tourism and migration.
2. Combined with this stable policy and the natural beauty of the country attracting tourists, many foreign investors make investments in hotel and resort projects.
3. The Montenegrin government has recently begun to grant a residence permit through the purchase of housing. The state has made this process quite easy.
4. Due to its proximity to Russia and Turkey and the Middle East, the property market in Montenegro is caused by the arrival of investors from many countries.Although nothing can be guaranteed in the real estate sector, the positive trend of the Montenegrin real estate market gives confidence to the future.
Real Estate Trends in Montenegro Since 2008
Like other countries where foreigners have invested in real estate as a second address, Montenegro has been greatly affected by the 2008-09 Global Financial Crisis. By mid-2009, housing prices fell by 20% to 30% from pre-crisis levels.Fortunately, the negative effects of the crisis were overcome with the entry of eastern investors, mostly Russian, into the real estate market. In the last decade, the interest of the east has supported the upward trend in property prices in Montenegro and economic recovery has taken place.
Latest Economic IndicatorsIn 2013, the World Bank published a report called Preparation for Welfare. This report states that per capita income in Montenegro has tripled over a decade and is the richest country in the Western Balkans.Overall, signals from the Montenegrin economy over the past five years have been positive. Gross National Product has grown in every quarter (up to 6%) since the beginning of 2013. Gross wages have risen by about 20% since mid-2015 and consumer price inflation was kept below 3%.The only missing problem is unemployment. On the other hand, this problem is an opportunity for foreign investors. The unemployment rate reached a record level of over 22% in early 2017 and has since declined slightly and reached 15%.In general, supply in the markets remains below demand, thus providing important opportunities for investors.
Impact of Tourism on Real Estate Prices in MontenegroNormally, foreigners settling in a country have come to that country as a tourist before. The situation is similar in Montenegro. The only difference is that a larger proportion of tourists come here to see it as a country to live in. Therefore, the majority of those who come as tourists follow closely the Montenegrin real estate market after their visit.With billions of dollars spent on tourism construction projects, Montenegro will host more tourists each year than the previous year.
Where Did Real Estate Prices Increase Most in Montenegro?
The lands in the Bay of Kotor are very popular for hotel and resort investors. It is the southernmost fjord in Europe. If you plan to live there all year round, it is also attractive for ocean views and out-of-home activities.For example, Diar, Qatar investment, has started a large holiday complex project in Tivat with a cost of 250 million Euros.On the one hand, this interest makes it difficult to find cheap property in these parts of Montenegro. On the other hand, however, it is clear that prices will be higher when these purchased properties will be sold. Montenegro is more than just this coastline. About one third of the population lives in the capital Podgorica. It is the city with the highest potential for long-term renting of residences, especially as it is the city where the working population lives.Moreover, inland there is Niksic, Montenegro’s second largest city. Housing prices are lower than coastline and capital.
Montenegro Commercial Real Estate Market
Montenegro is a great place for an entrepreneur who wants to start his own business and settle down. However, the choice of housing to live in, not short-term long-term rental alternative should be selected. Therefore, short-term rental lists should not be looked at at all.It is possible to find the same house at a higher price, especially if you are conducting your research in English.Especially Podgorica is the most preferred area for commercial real estate. This is due to the fact that there are many alternatives, the most populated city and the highest income level.
Future trends
Fifteen years of economic success is impressive.As income and foreign investments are thrown, real estate prices have risen and continue to rise. Montenegro’s economic policies continue to support the tourism sector. Therefore, the real estate market will continue to strengthen especially in the coastal areas and in the capital Podgorica.The only possible risk is that if the supply does not meet the demand from the external investor, prices will rise further and the real estate market will become hot.As stated in government development plans, the facilitation and incentives provided to foreign investment will continue. Therefore, real estate investment in Montenegro will be a profitable investment in every way. Montenegro is a great (and increasingly popular) place to live. Most people, who are on their way to this country, will continue their investment research, especially since buying property guarantees a residence permit. Especially in the coming days, as the interest of Middle East and Asia region will increase, it is inevitable that movements and prices in real estate market will continue to increase.