Montenegro is an anomaly in the European real estate market. The investment returns for those who invest in Montenegrin real estate are among the highest in the entire continent. The trend is rising thanks to the tourism boom that this Balkan country has been experiencing for the last few years. In addition to the growing tourism market, another driver of the real estate boom in Montenegro is its citizenship by investment program, which requires that the applicant invests in a tourism real estate project.
There is something for every taste among the Montenegrin real estate offers. You can invest in luxury villas on the coast, invest in modern properties in the capital, or choose to buy a property in the resorts of the northern part of the country.
If you are wondering about the taxes associated with investing in real estate in this advantageous jurisdiction, you will be pleased to know that taxes on the transfer of land, property, and capital gains are on average twice as low as in the rest of Europe.
Perhaps the most challenging thing about doing business in the Montenegrin real estate market is that all official documentation is always required to be filled in Montenegrin language. If you want to make sure everything is right, it is highly recommended to count on our team´s help.
Montenegro has a bright future ahead, mostly because tourism projections (despite the COVID-19 pandemic) expect stable growth in the coming years. But that also means that maybe property prices will start to rise, therefore, now is the best time to enter the real estate market for lower prices than the European average but getting better returns on your investment.
The rush is dictated by a potential rise in prices as the Montenegrin market develops and the time runs out to file a CBI application. You can receive a Montenegrin passport through your real estate investment only until January 2022.
Although generally lower than in the rest of Europe, prices and particularities in Montenegro depend on what you’re looking for. Are we talking about a residence in the capital? A luxury villa on the coast? Likewise, it is always good to work with someone with expertise. The best prices and estates are sold quietly, and foreigners are seen as an easy negotiation, so to get the best price possible, it is vital to work with a real estate agent.
These are, broadly, the main types of properties for sale in Montenegro.
- Apartments: Podgorica has plenty of multi-story building apartments. On the coast, apartments are more luxurious as they are usually complexes with pools located within a walking distance from the beach.
- Townhouses: They are generally located in the city suburbs, have a size of more or less 2,000 sq. ft, and usually are entirely new.
- Villas: They are even bigger than townhouses, more luxurious, and closer to the city center.
- Land plots: There are plenty of land plots in Podgorica and its metro area to build what you want and how you want it.
Similarly, the locations of the real estate fall into three categories:
- Tourist areas on the coast.
- Small towns, especially in the north.
This combination of classes will determine the price ranges and characteristics of the real estate you might be looking for.
However, if we look at the real estate market’s investment, it’s mostly targeted at touristic real estate. This has two reasons. First, tourism drives Montenegro’s economy. Second, the CBI program requires an investment in tourism, which has increased the number of development projects. Similarly, one of the best ways to obtain profit from real estate investment is through rental income. As the prices are low for European standards, it’s easy to find someone to rent your estate to, especially during the tourist season (from May to September). Moreover, the prices are increasing, which means you can get an incredible investment return if you buy now.
The most sought after touristic real estate locations and the ones with the most projects under development, mainly approved developments for the CBI program, are in the south:
- The Bay of Kotor.
- Budya, which is called the Balkan Miami and has more than eight miles of beaches right on the Adriatic coast.
- Seaside strips near Bar, which are usually filled with Russian tourists.
Now, if you’re thinking about investing in Podgorica, don’t let the 190,000 citizens number fool you. It has plenty of differences between neighborhoods. Some of the most-wanted neighborhoods are Blok 5 and 6, especially for families, and Pod Goricom is for the-top-of-the-top. Podgorica has one of the lowest sq. meter prices among European capitals, at a meager average of €1,000. In comparison, in Zagreb, the square meter costs €1,900, and in Belgrade, it costs €2,200 approximately.
What are the main factors swaying property prices across Montenegro? There are many influencing factors over the positive trends on Montenegro’s real estate market:
1.The country has had a pro-business, stable government since its independence.
2.The country’s beautiful landscape and its appealing business environment have attracted loads of FDI for developing hotels and touristic complexes.
3.The Montenegrin government reformed residence laws and now it is possible to apply for a fast-track program through property acquisition.
4.The CBI program has led to a renewed influx of FDI in touristic real estate.
5.The country’s geographical location, close to Russia, Turkey, and Southern Europe means there is a mix of foreign investors willing to take part in Montenegro’s real estate business.
Montenegro’s real estate prices fell by almost 30% during the European crisis. However, not long after the crisis, Russian investors started to purchase land lots to build seasonal homes, followed by western investors once prices started to rise again.
The future trends are positive. Real estate prices have increased but are still affordable. More investment, more tourists, and more luxury projects should also mean a sustained growth in prices, which means better investment returns for those who take advantage of the wave when it´s at its lowest.