Residential property market in Podgorica

Over the past few years Montenegro has been recognised as the most vibrant and dynamic economy in the Balkan region. Whilst the coast remains the most interesting area for investments in real estate and tourism, it is equally apparent that the capital city of Podgorica has become a business hub hosting the foreign companies coming into the region. The capital city was mostly neglected by foreign buyers up until recently and the real estate market was dominated by domestic investors and first-home buyers. However, with the economic growth of the country, the capital city finally started to receive attention. Both commercial and residential markets bloomed in the past few years. This especially proved to be true in 2019, which was very successful following the price increase and introduction of some new trends on the market.

What happened?

Buyers were mostly interested in the new buildings, mostly because they get a ready-to-move-in property, while apartments in the old buildings always require renovation. The average prices per square meter in Podgorica increased by 8% in 2019. The largest price jump was in Tološi area where the highest price per sqm was €1.400 which has now been increased to €1.600. The reasons behind that are several smaller luxury projects that are under construction. A price-jump of the higher price limit happened in Momišići as well – €1.800/sqm. The only area with a price decrease is Gorica, mostly due to the majority of the properties being large luxurious apartments that have not been in demand over the past few years. The prices now start at €1.300/sqm and go up to €2.000/sqm (here the higher price limit mostly due to the luxury building next to the St. George church. The high price jump in some ‘unusual’ areas is mostly due to the new and more expensive projects compared to the older buildings in the area. New projects in Zabjelo, Ljubović and Zagorič are keeping the prices stable (€1.000 – €1.200/sqm).

Millennium Bridge in Podgorica, capital city of Montenegro (photo: Drone Studio Tivat)


Podgorica remains a very attractive buy-to-let city in Montenegro, due to a dynamic economy and inflow of people from other regions. It is the business, educational and cultural center of the country with 'rental season' lasting throughout the entire year. If you plan to put your apartment on Airbnb and Booking (short-term rentals) the areas around Capital Plaza, Downtown, and City Kvart will be the best option. If you are doing long-term rentals, the large apartments in Blok 5 and 9, and area around famous ‘Five widows’ will do well. The rents of more luxurious apartments increased. In the Capital Plaza area, a luxury one-bedroom apartment was rented for €670 per month – something which was not possible only two years ago. Luxury houses are doing very well, in particular if done according to the high safety standards and in a nice area. The embassies, which are the usual lessee of such properties, have their requirements in terms of quality, safety and location. The rental yields for residential apartments are somewhere between 5% and 7%. Everything above is considered an exception, but not uncommon.

Market division

Most realtors divide Podgorica’s real estate market in two categories. First, with the properties from €1.000 to €1.200/sqm where the price is the most important factor for a buyer when making a decision. This category is dominated by the first home buyers. Second, with prices over €1.400/sqm, where location, design and quality of materials play an important role for a buyer. However, with the price increase, there is also the emergence of the third category - the apartments above €1.800 per sqm (luxury category). Five years ago, such apartments were rare, and there were only a few buildings that were keeping such a high price, however, it seems that the market is finally starting to develop a more luxurious segment in Podgorica.

Where and why to invest?

The experienced buyer will know the three Ls – location, location and location. Well, in the time of expansion of a city, the prices in the central/downtown areas often tend to decrease (what exactly happened in Podgorica in the last decade). The new modern projects are happening mostly outside the city centre and in the new ‘business districts’ increasing the prices in those locations. However, after a certain time, the downtown and historical areas tend to become fancy again, as soon as the city expands too far. The reasons are obvious, the new developments are happening too fast, faster than the expansion of public institutions – schools, hospitals, sport facilities, parks, road infrastructure, etc., and what seemed as a family oasis at the beginning, turns to be a hassle when challenged with daily routines – driving kids to school, going to work, visiting friends… Thus, the residential projects (new and old) close to public institutions, to downtown, and governmental buildings will always keep their value. The luxury buildings close to the embassies, and large business buildings will keep their rental attractions, as the foreign companies and their staff will always look to rent something of a high end and close to work. Yes, downtown, there are no many new buildings and most of the apartments on the market are in the old buildings that need to be renovated. The costs of renovations are still relatively low in Montenegro, and it is worthy of investment.


Probably the most wanted area in Podgorica, Preko Morače is considered to be the 'new city center'. Being home of many companies, several schools and universities, parks, shops and restaurants, this neighborhood is the favorite location of the upper-middle class (mostly families and business people), both foreign and locals.


The prices in the famous luxury neighborhood dropped and there are some good buys in Gorica C area. Its proximity to downtown and the Gorica natural park, make the area pleasant for family living, but also for someone who is looking for a peaceful and quiet neighborhood close to the city center. The schools are in the vicinity, the playgrounds for kids and connections with the rest of the city are solid.

Family house with yard, Gorica C


The new business district - definitely the area to consider if you are buying real estate for investment purposes. City kvart and the area around the Capital Plaza are very popular rental neighborhoods among business people and students. The entire area is dominated by new and modern buildings, usually with their own underground garages, while the retail spaces on the ground floors are filled with restaurants, bars, shops, gyms, etc.

Property prices here are relatively higher - prices per sqm range from €1,450 - €1,750, while monthly rent for one-bedroom and two-bedroom apartments are around €350 and €600 respectively.

The highest price sold in City Kvart in 2019, was €1.750/sqm, for a studio, while the lowest was €1.400/sqm for a three bedroom apartment.

What is new?

Zain Park project is a true novelty on the market in 2019, being the first gated community in Podgorica.

Residential project Zain Park

What is missing?

The new, more expensive projects are increasing the quality standards, however they still lack implementation of property technology, services of concierge and doorman. Modern luxury living, together with perfect locations, requires these elements as well.

What is "the most wanted apartment"?

The most wanted property in 2019. is a one-bedroom apartment up to €50.000, preferably in the Preko Morače area. Yet, such an apartment is difficult to find, except for those which require a complete renovation. However, €50.000 is the amount that can still buy you a nice studio or one-bedroom apartment in other locations in Podgorica.

COVID-19 interruption - what to expect in 2020?

The COVID-19 is changing the world by causing unprecedented health and economic crisis. No country will be spared of the devastating consequences of partial or complete closures of economic activities. The stock markets crashed, many airports remain closed, with tourism probably being the most affected industry.

Montenegro is the last European country to be affected by the virus. This gave to the government more time to introduce strict measures to delay the arrival of the virus, and later its inevitable spread. Consequently, a (non-essential) economic activities have been closed, with severe limitation of movement of people and the introduction of police hour. As we write this document (end of April), in Montenegro the situation seems under control with announcement of slow opening of economic activities for beginning and mid May.

While it is too early to predict the exact impact on the real estate sector at this stage, it is expected to see a drop in the number of transactions and a reduction of prices. There are however some positive aspects that might play a role of cushion and soften the economic impact of the crisis. In the first place, for the past two years, the Montenegrin economy grew constantly, reaching 4.7% and never going below 3.1% GDP increase (see the chart below). The predictions were similar for 2020, while this will inevitably slow down, the past growth will give a formidable starting point for the economy. Further, the banking sector seems liquid and with a low percentage of non-performing loans (NPLs).

GDP growth chart (source: MONSTAT)

Secondly, the financial institutions in Montenegro were very cautious in giving the loans after the 2008 financial crisis and kept their interest rates high (this in particular for the real estate sector). Now it is the time for them to support the economy and to inject accumulated surpluses. The Central bank of Montenegro already announced its support for this to happen. If the banks come out without major damages, we can expect positive implications for the real estate sector.

Finally, the prices of real estate in Podgorica, in particular in the cheaper segment of the market, were not inflated before COVID-19, where the prices of €1.000 to €1.500, were giving a maximum margin of profit to developers of 10% to 15% (for cheaper apartments), and a maximum of 15% to 25% (for a higher-price segment).

Yet, if the prices go slightly down, with the price of oil dropping significantly, and thus the construction costs as well, with the help of the government recovery plan, the new developments will probably be finished and construction companies will still keep a small margin of profit (or at least they will avoid any major failures). Prices in Podgorica will be much lower than in any other European capitals and this will make it an interesting investment opportunity. The market in Podgorica will recover faster, as the rentals will keep steady in the capital city.

We need to be aware, that small, open economies relying on tourism are particularly on risk, which might affect the real estate market as well.