Even though Montenegro is a relatively tiny country (less than 14.000 square kilometers in size), its real estate market is very dynamic and diverse. Here you can find pretty much anything: from historic ruins, gorgeous pieces of land, through simple apartments and townhouses all the way to luxurious, fabulous penthouses and stone villas with ‘million-dollar’ views. Having in mind Montenegro’s growing popularity among international real estate investors and second-home buyers, it’s no wonder the real estate offer is so plentiful. If you’re also thinking about buying a property in Montenegro here we aim to give you some useful information about the real estate market and what to expect.
The market has enjoyed stable growth in recent years. One of the reasons for that are the low bank interest rates whilst the other is the investment-friendly climate. There have been many positive business examples that have been successfully launched during the last decade and there are still more in the pipeline. Since becoming a member of NATO in 2017 and its current drive to join EU, Montenegro is giving signs of additional stability and safety. It is also important to mention the new Citizenship by Investment program which was launched in January 2019 which will provide Montenegrin citizenship for up to 2.000 investors who meet the defined criteria.Now, add to all of this the wonderful nature, lifestyle, 270 sunny days per year, 117km of beautiful beaches, and you start to get a picture of why Montenegro is such an amazing country to live in.
There are three main regions Montenegro - coastal, central and northern - and the real estate offer differs accordingly. The coastal region is the most developed and attractive, and consequently prices of properties are, on average, higher than in the other two regions. Budva and Boka bay are highest in demand, with prices per sqm ranging from €1.500 to €4.000. Very attractive are the large real estate projects along the coast where the prices are significantly higher: for example, price per sqm at Lustica Bay’s Centrale starts at €2.800 for an apartment in the upper village area, called Centrale, while sqm in Portonovi starts at €6.500 and goes to as high as €11.500. One of the main advantages of owning a property in these projects is that they usually provide rental management services, which means that the project company will help you rent your property while you’re not using it and manage the entire rental process for you, thus ensuring steady return on your investment.
When talking about property prices, things are somewhat different in other two regions: in Podgorica, the capital of Montenegro, prices range from €1.000 to €2.000 per sqm, while in the north of the country properties can be bought from as low as €500 per sqm.
Montenegro is a very attractive tourist destination with many international travelers visiting the country every year. The number of tourists in 2018 surpassed 2.2 million with this number expected to increase by over 10% and hit 2.5 million in 2019.
Thanks to the improved flight connections, Montenegro is now easily reached from all major European cities with many low cost air companies flying direct flights either to Podgorica or Tivat.
All of this has greatly affected the local real estate market, because many tourists visiting the country often choose private accommodation over a hotel in order to live the most authentic Montenegrin experience. Hence, owning a home in Montenegro is an excellent investment. Kotor and Boka bay are in the main focus of tourists, which they usually choose as their ‘base’ from where they can explore other parts of the country. Prices for short-term rentals (the lettings season here lasts from beginning of April until October) in Boka bay range from €100 per day for one bedroom apartments to €1,000 per day for luxury villas. In case of long-term rentals, the prices are €350 to €600 per month for studios and one bedroom apartments and €800 to €1.500 per month for two and three bedroom units.
‘Sales & Purchase’ agreement is drafted by the notary and the fees range from €170 to €350+ depending on the value of the property that is being purchased. Keep in mind that these prices do not include VAT (which is 21%). Buyer is the one who has to pay for the notary fees, however, this cost can be split between the buyer and the seller, if they reach such an agreement. Fee for transferring the ownership to the buyer is €16, while the Property Transfer Tax is 3% of the official value of the property determined by the official evaluator. However, in case where the buyer is the first owner of the property, i.e. buying from the investor, the Property Tax is waivd and there are no charges whatsoever.
For a detailed overview of all administrative fees take a look at the article ‘How much does buying a property in Montenegro really cost you?’
There is something about old properties that new ones lack: they are usually found in exclusive locations, such as old city centers where there’s no land left to build new buildings; they often have high ceilings and floor-to-ceiling windows which instantly means larger and brighter rooms; they come with inevitable antique charm and, often, with the need for renovation. So, how much do you need to invest in renovating an old property? A rough estimate is €150 to €300 per sqm, but you’ll need an actual renovation project plan to be able to precisely determine overall costs. To create such a project plan, architects usually charge €20 to €25 per sqm. Your overall renovation budget will vary depending on the condition of the apartment, amount of work that needs to be done, materials you want to use, etc. Take a look at our renovation plan breakdown which will help you get a rough idea on what to expect before diving into this project.
If you’re ready to make Montenegro your new home or you want to do business here, get in touch with us and we will support you throughout the entire process.