The price per square meter of a building under construction in Kolašin cannot be found below 2,000 euros, while the square meter in apartments in condo hotels on the list for economic citizenship does not fall below 10,000 euros.
The current situation in the global real estate market varies from country to country, but in most countries, there is a market stagnation and a decline in real estate transactions. In Montenegro, the number of real estate transactions has decreased, but there hasn’t been a significant drop in prices.
Real estate agencies in Kolašin emphasize that the current prices in this town are very high, considering them the “strongest” in the region. This increase in prices, as reported to Pobjeda, is particularly noticeable in the segment of new construction and properties in ski resorts.
The price per square meter of a building under construction cannot be found below 2,000 euros, indicating high demand and investor interest in real estate in Kolašin. Additionally, the prices per square meter of apartments located in ski resorts reach up to 10,000 euros, further confirming the popularity of this area among real estate buyers.
This high price per square meter testifies to the growing importance of Kolašin as a destination for skiing and resorts, but at the same time, it poses challenges for those looking to invest or buy property in this area. It is interesting to note that real estate prices in Kolašin have even surpassed those on the coast, indicating changes in buyer preferences and a focus on mountain destinations.
This is a direct consequence of the fact that in Kolašin, nine so-called condo hotels are being built for buyers with Montenegrin passports. Foreigners interested in our citizenship prefer Kolašin over the coast because they are obliged to pay 250,000 euros for properties in the north, while in the south, the requirement is 450,000 euros.
According to our interlocutor, in the last six months, there has been a traditional demand for properties in exclusive locations, both within and outside cities.
Due to the crisis, there is a smaller number of buyers from the EU. We are experiencing a stalemate in the market – buyers are not making purchases, and sellers are not lowering prices – said Veselin Dragaš, president of the Real Estate Trade Group and director of the Forte Mare agency, to Pobjeda.
Currently, Dragaš emphasizes that the supply of properties in sought-after locations is very limited, even though new construction is still in full swing, as most investors are not closely following global and regional developments.
Moreover, in Montenegro, a small number of investments are realized through credit funds. Demand here in the fourth quarter of 2023 was lower compared to the same period in 2022, but it did not significantly impact property prices – stated Dragaš.
He reminds that property prices are influenced by inflation, interest rates, laws, taxes, subsidies, so banks have raised interest rates. However, he emphasizes that Montenegro does not belong to primarily credit markets.
When banks raise interest rates, buyers are less likely to decide on real estate purchases using loan funds. In primarily mortgage markets, reduced demand more quickly affects property prices because investors are forced to lower prices to repay loans that financed their projects. Montenegro does not belong to primarily credit markets, so we cannot expect a significant drop in property prices here as a consequence of rising interest rates, explains Dragaš.
As for assessments, he believes that there will still be a decrease in prices, but not sudden.
If we look at the situation in the EU and the regional real estate market, we can certainly expect a decrease in total real estate transactions compared to 2023. A decrease in transactions will not lead to a sudden drop in property prices. However, if buyer interest significantly diminishes, we can expect a gradual reduction in property prices over an extended period – concludes Dragaš.
In the region, the decrease in transactions was significantly felt in Serbia, where it decreased by 30%, and in Croatia, it decreased by 20% – said Dragaš.
He emphasized that the German real estate market experienced a drastic decline, with property prices now being half as cheap as in 2022 due to the country being in a recession. Banks are more cautious in providing loans, and both buyers and investors who cannot finance new projects are seriously affected, endangering the construction sector.
Property prices are subject to changes, but it takes a longer period for a decline to occur. According to statistics, 70% of real estate buyers on the coast, which represents the most significant market besides the capital, are foreigners. If significant economic changes occur in their home countries, it will certainly have an impact on our real estate market – claims Dragaš.
