No, Russians and Ukrainians are not selling seaside real estate below the price – Market stable and will continue growing, foreigners still to invest in Montenegro intensively

Montenegro is still an attractive destination for foreign investors and no, it is not true that foreigners – above all Russians and Ukrainians, are leaving the country in droves, selling real estate below the price. The market is stable, with a tendency of growth, the projections for the coming period are also very positive, which especially pertains to the luxury real estate segment. Montenegro continues developing as an attractive market with numerous planned projects which will additionally improve both the infrastructure and the quality of life.

This is said by eKapija’s interviewees with whom we checked the veracity of the increasingly frequent media allegations in the region of Russians and Ukrainians intensively leaving the Montenegrin market.

There has certainly been some reduction when it comes to investments in real estate. However, investments are still high, and the drop is a consequence of both the global market trends and a local flaw – the bad infrastructure.

Overall investments dropping, but still very high

As Darko Djikanovic, a market analyst from the Adriatic Advisors agency, says for eKapija, foreign direct investments in real estate reached the amount of EUR 237 million in the first seven months of this year, which is a drop of around 9% compared to the same period last year.

– Although this is a significant drop, I believe that this number is still relatively high, especially considering that the year 2023 was a record year when it comes to investments in real estate. The drop of investments in 2024 is partly expected, because the market is stabilizing after the record growth in the previous period, which is the result of several factors, among other things, the big inflow of foreigners, which has influenced the market boom – believes Djikanovic.

As he said, foreigners’ investments in real estate, in the first seven months of this year alone, exceeded the annual level of investments from the years prior to the pandemic.

– That shows a continued and strong demand from foreign purchasers who have recognized Montenegro as an attractive destination both for living and for rest and investments – our interviewee says.

No mass leaving or sales below the price

Niko Lakovic, Managing Partner of Montenegro Sotheby's International Realty, says that the drop that has happened in the market is no cause for alarm and that it is also not a consequence of foreigners leaving the country in droves.

– I emphatically refute that foreigners are leaving Montenegro and that they are selling real estate en masse. According to our projections and the results we achieved this year, there were absolutely no Russians or Ukrainians drastically or hurriedly selling real estate. What is happening is a regular situation where they are selling real estate, but also buying. Also, they are not selling them at any kind of discount prices, but at market prices – points out Lakovic.

As he adds, there is, in fact, no trend of leaving.

It is true that we have had a drop in investments of some 9%, but that is exclusively because, in the west, there is a stagnation of the market due to the interests of real estate, which partly spills over to our market as well. However, the developers have recognized that here, so they have implemented repayment plans, which the investors also see as a great opportunity for investing in real estate. For example, Lustica Bay has a five-year repayment plan without an interest, Portonovi also has a good plan with a certain interest, whereas Porto Montenegro is preparing an attractive offer and a repayment plan for the new project Synchro – says Lakovic.

Another local flaw which certainly influences people when investing in Montenegro is the bad infrastructure.

– However, as we can see, the Government is working intensively and at an accelerated pace on solving this problem, so we expect that situation to be overcome in the next period as well – points out Lakovic.

The real estate market in Montenegro is currently showing signs of adaptation following the extremely successful last year, Natasa Grdinic, the CEO of CMM Investment Consulting Group, says for eKapija.

– Although foreign investments recorded a drop this year compared to the record amounts last year, it is a natural phase in the market cycle as a reaction to global events, and not a sign of a long-term negative trend – she says.

As she points out, many foreign investors, including Russians and Ukrainians, are still actively investing in Montenegro.

– They are currently selling real estate with a big profit because of the price that the market offers, which enables them to use the current moment and achieve considerable profit. This strategy not just improves their cash flow, but also enables switching to other projects and investments, considering that the market has shown to be very good and promising – eKapija’s interviewee says.

According to her, at CMM, they are following the whole market, so they can say with certainty that the interest in Montenegro is increasing in a major way.

– Our continuous presence and market analysis enable us to notice the growing interest of the investors, which points to the stability and attractiveness of this market – she says.

The story of the increased sales of real estate owned by Russians and Ukrainians is also refuted by Ivan Dasic of the Montenegro Prospects agency, who says that such allegations are entirely unfounded and that there are absolutely no data confirming them.

– The problem is that such information only harms the Montenegrin market, which is in nobody’s interest. The fact is that the rate of the sales has remained stable here, similar to the one from the previous years and there is absolutely no proof that would confirm the claims about the sale of real estate below the market value – says Dasic.

The analyses and experiences of local real estate agencies, he adds, show that the prices of real estate sold by Russians and Ukrainians have not deviated from the prices achieved by residents or owners of other nationalities, such as Serbs, Macedonians, or Bosniaks, and that they have definitely not been lower than the real value.

As he pointed out in a recent article for eKapija, what has happened in the past years, that is, since the Russian-Ukrainian conflict started, is that, due to the hampered transport and lack of direct flights to Montenegro, certain citizens of Russia, mostly people advanced in age, have sold their real estate because access to it has been made more difficult to them.

Another motive that can be considered in the context of increased sales are the sanctions imposed by Montenegro on Russian citizens, which have made banking transfers more difficult. Many banks have refused transfers toward Russia, even for citizens who are in no way connected with the regime, although the sanctions that Montenegro has imposed as one of the requirements for joining the EU do not mention this topic.

– However, plenty of Russian citizens which are residents of western European countries have continued buying real estate in Montenegro without any problem, through foreign banks – says Dasic.

He also notes that Vladislav Maslennikov, the ambassador of Russia to Montenegro, has recently announced that, despite the Montenegrin-Russian relations, which are at their lowest point since the beginning of the two countries’ diplomatic relations, in the first five months of 2024, as much as EUR 54 million was invested by Russians in the Montenegrin economy. Last year, 112 million of Russian money was invested in the economy of Montenegro, and 250,000 Russian tourists visited Montenegro.

– Most of that money was invested in real estate, and Russians are still the second biggest investors in the country – concludes Dasic.

Real estate prices still growing

If we’re talking about prices, Darko Djikanovic says that, after the boom in 2022 and 2023, which was caused by various factors, among other things, by the inflow of foreigners, high inflation rates and the strong borrowing among the citizens, the real estate market in Montenegro continues recording significant activity in 2024 as well.

– Although precise data on the number of sales and purchase apartment transactions are not available, based on the market indicators, including the insight from the field and the official statistical data, it seems that the number of transactions is lower compared to 2023, but it is still at a relatively high level – he says.

Despite the lowering of the number of the sales and purchase transactions, the prices of real estate, he says, are still growing.

– So, for example, the average price of a single-room apartment in Podgorica has reached EUR 2,000 per square meters, whereas in 2023, it was EUR 1,650, and in 2021, it was EUR 1,200 per square meter. This is a growth of 67% within three years – says eKapija’s interviewee.

At the seaside, the prices are significantly higher, and the most expensive cities are Tivat, Kotor and Budva.

– In Tivat, the average price per square meter of a single-room apartment is EUR 3,750, in Kotor it’s EUR 3,000, whereas in Budva it’s EUR 2,900. Slightly lower average prices are in Herceg Novi (EUR 2,500), Bar (EUR 2,200) and Ulcinj (EUR 1,600) – he points out.

Additionally, within these cities, he says, we have micro-locations where prices are much higher than the displayed average values, whereas luxury resorts are successfully achieving some new records.

– Despite the reduction in transactions, the market remains active, and no major price adjustments have been recorded so far – on the contrary, the prices continue to grow – notes Djikanovic.

When it comes to the luxury segment, Niko Lakovic says that, according to some projections and the realized transactions, the prices grew by around 20%.

– The prices are very stable and have a tendency to grow. For example, within the Lustica Bay complex, the prices for signature projects, for the villas and residences, range between 10 and 12 thousand euros per square meter. The prices for apartments in Porto Montenegro range between 9 and 10 thousand euros, whereas within the new project Synchro, they will go from EUR 13,000 up. Those will be unique residences which will have a beach in front of the facility and a category of 5 plus stars. For standard units in the Portonovi complex, 9 to 10 thousand per square meters needs to be set aside, whereas the prices for premium buildings and villas go over EUR 10,000 – our interviewee says.

Lakovic also notes that the data on the drop of transactions of 9% pertains to the period until July, which could change considerably on the level of the whole year.

– It was precisely in July and August that a considerable number of transactions was realized – he points out.
Supply and demand ratio

One of the main reasons for the trends of the growth of prices and the drop in the number of the transactions being opposed to each other is that the offer of the newly built real estate is limited and does not match the until-recently-high demand, both from the local populace and from the foreigners, believes Darko Djikanovic.

– In the period between 2018 and 2022, the number of newly built apartments, as well as those planned for construction, was at a very high level. In the meantime, the demand continuously grew, culminating in 2022 and 2023. The construction sector has now recognized this disbalance between the supply and the demand, so now we are recording the growth of the offer of newly built apartments – he says.

When it comes to the most in-demand locations, there have been no changes there.

– The capital city, as the center of most of the events, is recording the biggest activity and attracting the biggest interest from the local populace, but also the foreign citizens who have moved here. The seaside, of course, attracts the most attention from foreigners, and Tivat, Kotor and Budva remain the most attractive destinations. In addition to those already mentioned, in other seaside cities, we have noticeable activities in the market, and some interesting projects are ongoing, both in the tourism sector and the sector of luxury real estate, which will have a big influence on local markets – Djikanovic points out.
Montenegro remains desirable destination for foreigners

When it comes to projections for the coming period, eKapija’s interviewees agree about one thing – foreigners will keep investing in Montenegro.

– I believe that Montenegro, when it comes to real estate, will remain an attractive destination for foreign investors. As a developing country which is entering the international market more and more, we have plenty to offer, especially in the segment of luxury real estate – says Darko Djikanovic.

What we have to keep working on is the building of the image of a safe investment destination.

– Many foreigners still don’t have enough information about Montenegro and, as a destination, we don’t infuse them with trust. It is only when they visit Montenegro that they realize what is in fact offered here, which often results in their willingness to invest – he adds.

Also, internally, the bad infrastructure and poor airline connections are an obstacle.

– Investors want a simple and quick access to destinations they invest in. I believe that an improvement of the road infrastructure and an increase in the number of direct flights are crucial for a further development – says Djikanovic.

He also says that, considering that the prices of real estate continue to grow, which the number of transactions is dropping, in the coming period, the purchasers will have a better negotiation position than was the case in the previous years when the sellers had the dominant role.

– This should especially reflect on the segment of real estate of lower and medium value, which will contribute to more balanced conditions in the market. In a shorter term, there might be an adjustment of the prices, and in a longer term, it is difficult to predict the price trends, because numerous factors, including global economic and political events, can have an impact on the market and turn around the tendencies so far – he says.

In the luxury real estate segment, he says, he doesn’t expect a drop in the prices.

– Luxury real estate continues recording solid results with a very limited offer – concludes Djukanovic.

That the projections for the coming period are extremely positive is an opinion shared by Natasa Grdinic.

– Montenegro will continue developing as an attractive real estate market, with numerous planned projects which will additionally improve the infrastructure and the quality of life. With the stabilization of the market and adaptation to the new circumstances, we remain a very desirable destination for foreign investors. In short, Montenegro is still a dynamic market with great potential for future growth and development, so as a company, CMM continues to witness and support the growing interest in this region – Grdinic says.

Niko Lakovic repeated that the Montenegrin market remained stable and that, in the coming period, additional growth was expected.

– Montenegro’s getting closer to the European Union, but also the development of the new announced projects, such as Four Seasons and Bigova Bay, will bring new value to the market of real estate in Montenegro. We have a country whose beauty and position attract foreigners – there is no pollution, the cost of living is relatively low, and the tax policy is extremely favorable. Also, it is relatively easy to get a work permit, we are an open community where most people speak English, and we can reach any European destination in only two hours by air. All these are reasons why foreigners gladly come and will keep on coming to Montenegro – says Lakovic.

He also believes that developers in Montenegro will still facilitate the purchase of real estate for investors in the form of the already mentioned repayment plans.

– That’s another item which will considerably increase the sales and improve the future of the sector of luxury real estate. To clarify, people in the world of consumption as it is today keep money that way. They invest in real estate for which they have a repayment plan, and for which there are projections that the price will grow. If, for example, they buy real estate while it’s still under construction, at the moment they get the keys, the value of that real estate will be 20 to 25% higher, that is, more expensive than what they paid. Investors know that well and that is why they buy and invest in real estate – Lakovic points out and adds that the service that the client gets in those properties additionally stimulates investors and contributes to them making the decision to buy them more easily and quickly.

Dragana Obradovic

Adriatic Advisors

Montenegro Sothebys Realty

CMM Investment Consulting Group

Montenegro Prospects

Government of Montenegro

Luštica Bay

Porto Montenegro

Portonovi

Embassy of Russia in Montenegro

Darko Đikanović

Niko Laković

Nataša Grdinić

Ivan Dašić

Vladislav Maslennikov

Montenegro real estate

sale of real estate

value of real estate in Montenegro

investments in real estate