During the last year and a half, the real estate market in Montenegro has been characterized by a significant increase in prices, so compared to 2021, they are on average 40% higher.
Squares have been the most expensive in Tivat for a long time, and if we talk about demand – the golden triangle of Tivat, Kotor and Budva generates the greatest interest from buyers.
The Montenegrin market is characterized by predominantly residential construction, while commercial real estate is overshadowed by apartments. And this is where the great potential for development and investments in the coming period is hidden.
There are many challenges on the market, however, from an investment perspective, investing in real estate in Montenegro in the long run represents an excellent investment opportunity.
This is what Darko Đikanović, a real estate market analyst at the consulting company Adriatic Appraisal, said in an interview with eKapija.
Prices are rising, but so is the demand for real estate
According to him, a significant increase in prices is exactly what characterizes the real estate market in Montenegro in the past year and a half, and what we are all witnessing, either as active participants in the market or as passive observers.
In Podgorica , the average price of a one-room apartment is currently EUR 1,750 per square meter, while, for the sake of comparison, in 2021 the average price was only EUR 1,200. On the coast, prices are significantly higher, and the most expensive square meters are located in Tivat, Kotor and Budva.
“If you plan to buy an apartment in these cities, consider that the average price of a one-room apartment in Budva is EUR 2,750 , while in Kotor the average is EUR 2,950 per square meter”, Đikanović said.
Tivat, he adds, has been leading real estate prices for a long time, mostly due to the effect that Porto Montenegro and Luštica Bay have on the city’s image as a luxury destination.
Just this year, the average price of one-room apartments in Tivat crossed the threshold of EUR 3,000 and currently amounts to EUR 3,370 per square meter. Of course, growth fluctuated from city to city, but on average, apartment prices are now about 40% higher than in 2021 – he points out.
Despite the high prices, it seems that the demand is not abating, and at one time it was even said that there is not enough real estate on the market. Our interlocutor also agrees with that, stating that during 2022 the demand for real estate was at an extremely high level. This trend continued in 2023.
The construction sector has recognized the imbalance of supply and demand, as evidenced by the growth of residential construction after a long period of inactivity caused by the pandemic.
“The number of planned apartments in buildings that received construction permits in the first half of 2023 is 33% higher compared to the same period of the previous year, while the number of completed apartments increased by 30% on an annual basis, and the number of apartments currently under construction is also large”, Đikanović said.
On the other hand, the demand of credit customers is slowing down due to less favorable credit conditions.
“It is important to note that the demand for real estate is still high and that even in the domain of credit buyers we are talking about amounts that are at a higher level than in previous years. It is certainly to be expected that credit activities will slow down further if interest rates remain elevated for a longer period of time”, he adds.
As he points out, in addition to credit buyers, in our market, as well as in the region, a big role on the demand side is played by cash buyers, for whom the level of the interest rate is of less importance when deciding on a purchase.
“It is precisely this type of buyer who decides to invest in safe capital in times of economic and geopolitical uncertainty, i.e. real estate with a high potential for release and capital appreciation. Foreigners play a big role in this field, and that is why we have recorded a record influx of foreign investments in real estate in the past two years”, says the interlocutor of eKapija.
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