What are the most beautiful places and where to invest in real estate in Montenegro? It’s hard to boil it down to a single spot, to be honest. With hundreds of monasteries in unbelievable locations, tons of amazing scenery from north to south, and shimmering beaches engulfed by towering mountain peaks, this very unique landscape is what has made Montenegro so recognizable.
This is a very attractive place on earth that not surprisingly has attracted buyers from all over the world. It’s easy to see why the real estate market underwent a real surge from Montenegro’s independence in 2006. Many Russian (but also Irish, English, Israeli, etc..) started buying up property mainly along the coastline and propped up prices immensely. (Note: this was before the big financial crisis in 2008.) It is estimated that Russians alone have bought 100,000 pieces of real estate.
However, the political landscape changed dramatically since Montenegro’s NATO accession in 2017. Now many Russians are selling their holiday apartments and beachside villas, often for less than they have paid for it. This is an amazing buying opportunity for foreigners who strategically want to bet on surging prices in anticipation of Montenegro’s EU integration. As a bonus, in 2015, the Montenegrin government passed a law allowing foreigners that invest in Montenegro real estate to apply for residency upon purchase of a property, regardless of its value.
As a foreigner, you won’t face any restrictions if you invest in Montenegro real estate, except for land. You will need a company in order to purchase land; ownership can be later transferred in a simple and straightforward procedure. If you decide to rent out your property, you will be taxed at a rate of 9% – which is very low in international terms. Capital gains are also 9%. You are paying these in the case you are making a profit on the transaction.
Roundtrip transaction costs, that is “the total costs of buying and selling a property” are very low in Montenegro and amount to about 6% of the transaction price of the property. In case you are using a real estate agency for selling the property, their commission is 3% and paid by the seller.
Overview of the market
From beachside condos on rugged coastlines to mountainside villas with spectacular views, everyone will find something to their tastes in the Montenegrin property pool. Prices for new dwellings average 1150€ per sqm in the capital Podgorica and 1430€ in the coastal area. In cities like Budva and Kotor prices start at about 1800€ per sqm and range to about 3500-4000 €/sqm for prime locations.
All that being said, a few things you need to be aware of. Purchase and Lease contracts are mostly written in Montenegrin language. Besides, Montenegro is still behind in urban planning and detailed plans are not yet available everywhere. You’ll need to plan wisely and seek out reliable advice.
The good thing is: a lot of the best properties in Montenegro are still for sale. Check out the following guide on where to look for hot property, how to invest in Montenegro Real Estate from a value standpoint, and which pitfalls to avoid. We will start with the coastal region, then go over to the central region and finish off with an overview of the northern region.
The Coastal Region
Herceg Novi
Herceg Novi is a charming small city close to the Croatian border and close to the city of Dubrovnik. It has about 20.000 inhabitants and is a sought-after summer location with more than 300.000 tourists who came for a vacation in 2018 alone. This cozy seaside town is popular for its pleasant Mediterranean climate with warm and dry summers and mild winters.
Property prices range in between 1400€ and 2500€ per sqm which is a good deal if you compare it to neighboring Dubrovnik where the property is three times as expensive. It is only 50km away though.
Just in May 2019, Herceg Novi gave birth to Portonovi, a €1 billion superyacht marina that is set to be one of the most sought-after luxury destinations in the Mediterranean. Its own Portonovi Marina is operated by D-Marin and able to park 238 resident and visiting yachts. It will have a border crossing, a customs service, a pump for filling up fuel tax-free, and an international heliport. Prices start at 323.000€.
Kotor
Kotor is a medieval, picturesque town full of churches, museums, Venetian palaces, cozy cafes, and restaurants. It is hammered in between the huge and overwhelming mountains of the Bay of Kotor – a UNESCO world heritage site that welcomes thousands of tourists that arrive by plane, car or cruise ships. The Kotor old town is a romantic place with narrow streets, laundry that hangs in between old stone houses and cats relaxing on marble pavements. Outside the ancient city walls lays the harbor and several parts of the city with a mix of old and new buildings.
Kotor was built by seafarers. And, seafaring is still a major factor in the local economy. It is also known for its Faculty of Maritime Studies where a new generation of seafarers becomes familiar with the art of seamanship. This is a well-paid vocation that brings in millions of Euros each year and gets reinvested into the local real estate market.
The building code in Kotor does not allow any highrises. This is strictly limiting supply which is almost a guarantee for future price increases. Certainly interesting for everyone that wants to invest in Montenegro Real Estate now. Prices in the old town are about 2500€ per sqm, an outside ranging in between 1400-2500 € / sqm.
Tivat
Tivat was once a sleepy little town with a historic naval base. This has drastically changed since the construction of Porto Montenegro, a €500 Million Superyacht Marina built by Canadian billionaire Peter Munk. Now Porto Montenegro is home to the world’s largest berths and can host yachts up to 250m in length. Not surprisingly, property in Porto Montenegro is not exactly cheap: 6500€ per sqm is what you need to pay on average. It is still a good deal compared to let’s say the Limassol Marina on Cyprus where the average is about 15.000€ / sqm.
Sure, not everyone can afford these hefty price tags. In other parts of town prices, depending on location, go from about 1400€ to 3000€ per square meter.
Budva
Budva is the epicenter of Montenegrin tourism with close to 900,000 tourists that visited this beautiful city in 2018. Budva has about 20,000 inhabitants, but especially in the summer months, due to a huge influx of tourists, feels like a much bigger city. It has a well-preserved medieval old town in Venetian style with cobblestone streets, wrought iron railings, and traditional Mediterranean window shutters. You will find many small shops, restaurants, modern cafes and bars within the city walls.
Budva is a city that is booming and you will immediately notice it by walking through its promenade with many new developments in prime locations that have been recently built or are in the process of it. Some people do not like highrise buildings, but in Budva, they sort of fit to the scenery giving it a bustling and modern feel. There are cranes everywhere and it seems that everyone who can afford it, is building its piece of Budva’s future.
If you are looking to buy in a new dwelling, it is rare to find something below 1600€ per sqm. Prime locations ask for 3000-4000€ / sqm. In Budva, new buildings are generally more expensive than older ones. A bit further from the center, offers start from 1000€ / sqm, usually for an older unit that needs some sort of remodeling or renovation and goes to 1700€ / sqm for a new apartment in a nice and modern building.
Bar
Back in the days, Bar was a small town wedged in between the mountains, distanced 4km from the sea. In the 60s and 70s the new part of town was starting to get developed and this where the action is nowadays. The Port of Bar is the country’s main seaport with a capacity of loading 5 million tons of cargo annually. The city of Bar is also the last stop on the Belgrade-Bar railway that connects the Port of Bar with continental Europe. Big companies like Fiat use it to transport some of their models from Serbia to Italy. As an economic hub, Bar will also be connected to Belgrade by the Belgrade-bar motorway.
Bar, having about the same population size as Budva, is far from being that touristic. It hosted about 200.000 tourists in 2018: just a quarter of Budva’s whopping 900,000. And it makes sense. Bar is not primarily a tourist destination. But it is a city that is alive during the whole year, has a long and nice promenade, many amazing cafes and restaurants. It definitely has potential in becoming a sought-after expat destination.
And property prices reflect that. Average prices in Bar are about 1500€ / sqm. There are no offers below 1000€ / sqm reflecting healthy demand for in-city housing. Comparing to Budva, the construction sector is still lagging. But, with increasing inland immigration from the northern cities to Bar, the demand for flats and houses will likely increase. Add the increasing number of tourists that choose Bar as a base for further exploring the nearby Skadar Lake, the old city of Bar or just enjoy the sunny weather on one of its beautiful beaches.
Bar is a well-rounded city without the charms of Venetian Kotor and Budva, but very practical, spacious, the ideal solution for year-round living and raising kids and good value for internationals that want to invest in Montenegro Real Estate now.
Ulcinj
Ulcinj is Montenegro’s southernmost coastal city that features a beautiful old town overlooking the sea. There is a significant Albanian community in Ulcinj and you will notice that it feels different, more ottoman, than other Montenegrin cities. Ulcinj is maybe best known for its long and sandy beaches and the Bojana Island, a popular naturist campsite.
Property is less expensive than in other cities and even new apartments can be found for 1000€ / sqm. Apart from the Old Town, Ulcinj is not really beautiful architecture wise. And, it is not the cleanest and most organized coastal town. Other than that, there is huge potential along the Long Beach for the development of Resorts, Hotels, and Hostels.
Young folks like to hang out and party in one of the beach bars. There might certainly be a demand for modern hostels and small boutique hotels as well as all-inclusive resorts.
The Central Region
Podgorica
Formerly known as Titograd in homage to the Great Yugoslav Leader Tito, Podgorica has since evolved into a modern, vibrant city with excellent cafe culture. It is Montenegro’s biggest city with a population of about 150.000 and growing. As in other parts of the world, the trend in urbanization made people from rural areas look for better opportunities in cities.
During the 2nd World War, Podgorica was one of the cities that was bombed to ashes. There are older buildings, but the cityscape is dominated by apartment buildings left over from the Tito era, and new-built modern buildings. There has been very little construction activity in Podgorica for the last 20 years. But now, with healthy domestic demand for quality housing and international investors looking for investment opportunities, Podgorica has become a big construction site.
Prices in new buildings average only 1100€ – 1150€ / sqm making it one of the cheapest capital cities in Europe. There is big opportunity for foreigners who want to invest in Montenegro Real Estate outside the coastal areas.
Niksic
Niksic is Montenegro’s 2nd largest city with about 57.000 people. Once an economic stronghold in former Yugoslavia, many of its heavy industries did not master the transition well. Still, it is home to few of the nation’s biggest companies like a steel and bauxite mill and the Trebjesa brewery that produces the best-seller “Niksicko Pivo”. The above-average unemployment rate of 20% expresses itself in real estate prices that are cheap in Niksic. Prices for new dwellings have fallen very sharply. Only 5 years ago, you would have paid 1500€ per sqm in a new dwelling. Now, prices fell to 650€ / sqm.
Like in many smaller cities throughout Europe, Niksic has a demographics and migration problem of the younger population that look for better chances in the country’s capital, along the coast, or abroad. Niksic’s real estate market is cold at the moment with not many transactions taking place.
The Northern Region
Avoid the cities in the north
Property is not expensive in Montenegro’s northern cities. But there is a reason for that. A cocktail of high unemployment, structural economic problems, and bad demographics make small and medium-sized cities like Andrijevica, Berane and Bijelo Polje uninteresting to property buyers. And the question is when and if it will become any better. There simply is no influx of foreign nor domestic capital into these property markets, wages are way below the nation’s average and there are no major developments on the agenda.
Over the past two decades, more than 50,000 people fled this region and the numbers are only getting worse. According to government statistics, the unemployment rate in some cities is more than 50%. And with no jobs and no income, and no foreign buyers, the outlook for the property market can only be bleak.
The northern region however, is also hosting one of the most spectacular spots in the country with stunning mountains, untouched nature and resorts for ski and hiking tourism.
Zabljak and Durmitor National Park
Zabljak is a tiny Montenegrin town centered in the Durmitor National Park. This breathtaking park features dramatic mountain peaks, huge canyons and glittering glacial lakes at high altitude. The Durmitor region is a popular ski resort from December to March. In spring and summer, people switch to hiking, climbing, rafting, and mountain biking.
The Durmitor region is becoming a more and more popular tourist destination, especially for nature-loving and ecological-minded visitors. The National Park of Durmitor was visited by 220,000 tourists last year which is an increase of 17% compared to the year before. Since 2010, the number of tourist arrivals has increased fivefold. This is good news for people who invest in Montenegro Real Estate since it shows strong and growing demand from a diverse audience and this positive trend is likely to continue.
Apartments in the center of Zabljak trade for about 1000€ / sqm. But since Zabljak is a small mountain town, there are many cozy mountain chalets on offer with asking prices starting at 50,000€.
Kolasin
Kolašin is also one of Montenegro’s main spots for mountain tourism. Although many think that Zabljak boasts more natural attractiveness and might lead itself more to active tourism like rafting and hiking, Kolašin is way better accessible by road and rail. That might be a major reason why
Kolašin is located on the foot of Bjelasica and Sinjajevina mountains, which offer great conditions for skiing. Because of Kolašin’s altitude (954 m), the town is considered an air spa.
Biogradska Gora national park is in the town’s vicinity and is considered a premium tourist attraction. The development of Kolašin as a tourist destination is bolstered by the opening of Bianca Resort & Spa, a luxury resort in the town’s center.