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Thursday, May 23, 2024
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Investing in Montenegro does pay off

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The real estate market in Montenegro is constantly growing, and it can be said that it is currently the most active compared to the last 15 years.
Interest in apartments, houses and land on the coast, as well as in the interior of Montenegro, is expressed by foreign citizens, but also by a significant number of buyers from Serbia.

Some agencies are specialized in working with international clients, in addition to what are the current trends and prices on the real estate market in Montenegro, it is all about how buying real estate works for foreign citizens, which cities are most attractive to them, as well as why the economic citizenship program is particularly interesting to foreign investors.
The British and Russians used to buy the most, but that relationship slowly changed in favor of clients from the EU, Turkey, and even the USA. As for the region, in the last 8 years the number of customers has been growing steadily, there are customers from Serbia, which is traditionally an important market for Montenegro.
Compared to the previous period, it is positive that dependence on one dominant market has significantly decreased.
The coast is the most interesting for buyers, real estate in Budva is still the most popular, followed by the Bay of Kotor (Kotor, Tivat and HN), but also the southern part of the coast Bar and Ulcinj are becoming more and more popular, especially for those who want to buy a house in Montenegro. Budva, Kotor and Bar are sought-after locations.

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The trends changed from 2004 to 2008 when the dominant buying force was buyers from Great Britain, the Bay of Kotor was the most sought after, as well as old traditional stone houses and ruins. After that, as Russian buyers took over the primacy, the Budva and Bar region was significantly more represented.
Immediately after the COVID crisis, the demand for rural areas increased noticeably. Now there is great interest in houses in the Bar region from Western European buyers, especially Germans.

Of course, luxury complexes like Porto Montenegro, Lustica Bay and Porto Novi have always been attractive to buyers with higher spending power.
The sea view is still one of the most important features of every property, followed by proximity to the beach, restaurants, shops and other infrastructure. In addition, buyers are increasingly picky about the quality of construction, which is becoming a very important item when making a purchase decision.

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Finally, many buyers also look for the property to have rental potential, since most buy properties as an investment.
As for the type of real estate, apartments in Montenegro are the most represented and most sought after. There is also a growing demand for homes that offer privacy and peace.

There are over 1000 apartments and houses on the coast, a large number of plots, commercial real estate and hotels for sale.

It can be said that apartments are most represented on the Budva Riviera and Boka Kotorska, while the offer of houses is much larger on the southern part of the coast. However, the most beautiful villas are probably in Boka.
When it comes to business premises that interest foreigners, Stari Grad in Kotor and Budva lead the way, but also attractive locations in Podgorica – mainly “Across Morača”.

About prices

Real estate prices have risen a lot in the last year, so on average, apartments in Budva and in Bay itself cost around 2,500 – 3,000 EUR/m2, in exclusive locations (such as Perast) they reach 4,000 EUR/m2.
Real estate in Bar is cheaper, but even there the prices of apartments have jumped to almost 2000 EUR/m2 for apartments in new construction.
The prices of apartments In the interior are significantly lower.
Real estate prices in luxury resorts reach up to 10,000 EUR/m2, depending on the location and size of the property. Porto Montenegro, Lustica Bay and Porto Novi are already established projects. In addition to the mentioned real estate in Tivat and real estate in the municipality of Herceg Novi, several more new luxury projects are being announced on the entire Littoral.

The Montenegrin coast Is so small, compared to the large countries from which most of the buyers come, so it is often seen as a single entity, i.e. destination and focus more on the characteristics of the individual property that is considered to buy, as well as the micro location (neighborhood) in which it is located. The importance of build quality and look has already been mentioned, so that remains a primary factor here as well, in addition to price, however, in general it can be said that Boka Kotorska and real estate in Kotor attract clients with its unique combination of sea, mountains and beautiful stone houses and villas on the coast, Budva with its fantastic beaches and lively nightlife, while the region around Bar is attractive for living all year round.

After the opening of the highway and modern ski centers, Kolašin became very sought after and popular, a large number of exclusive condo hotels with which people can get citizenship and are under construction, as is Žabljak, since the tourist season lasts almost all year round. Many foreigners also visit these parts of Montenegro, so this year the tourist season in the north was excellent.

The north Is infrastructurally much less developed than the coast, but Kolašin is about to change with development of capacities and contents that follow the ski offer, but these changes were also accompanied by an increase in the price of residential space, which is now approaching the figure of 2,000 EUR/m2 and in at the foot of the ski slopes and up to 6,000 EUR/ m2.
The procedure for purchasing real estate is the same for foreigners and citizens of Montenegro.

The purchase contract is signed in a notary’s office, which makes the entire process safer, in person or through a certified power of attorney. Payment of the purchase price is usually made through a notary’s account. Buyers are required to pay 3% real estate sales tax and notary fees. The buyer does NOT pay the agency commission.

There are only some restrictions when it comes to buying undeveloped land.

Foreign nationals can also rent out purchased real estate to tourists and do not need a residence permit to buy real estate, but it can be obtained based on the ownership of a residential building (house, apartment) or business premises. Since the real estate is registered to the owner, it is necessary to attach the necessary documents to the Ministry of Interior, where the request for residence is also filled out. The procedure for obtaining a residence permit lasts up to 40 days.

For example, economic citizenship gives the possibility of acquiring Montenegrin citizenship to foreigners who can pay a minimum of €250,000 for real estate in the north or a minimum of €450,000 in the central part and on the coast, plus 200,000 for development funds in Montenegro, as well as if they meet the conditions of verification by accredited foreign agencies (capital checks, impunity, etc.).
The program gives momentum to the development of high-class tourism capacities, enables the inflow of significant funds into the budget, the creation of new jobs, but does not have the favor of the EU, which tries to suppress similar programs in member countries due to possible risks that the program may bring.

Agents cover the overall offer of projects that enable citizenship for investment, although there is considerable variation between projects in terms of location attractiveness, completion date, property status, availability, etc.
The purpose of the law on progressive taxation is to separate legal and illegal buildings, as well as buildings that solve the housing issue from cottages, secondary apartments, etc.

Compared to the previous period, the biggest difference is in the attitude towards the owners of undeveloped construction land, which is on the one hand in the case of foreign investors who a decade or more ago came into possession of attractive locations and do nothing justified, on the other hand this is a significant burden for local population who, for example, inherited construction land.

According to Article 9 of the Law on Real Estate Tax, the amount of the specific tax rate on the estimated market value of real estate is within the jurisdiction of local governments, and ranges from 0.25% to 1% of the market value for a legalized primary residence.
The tax Is higher if the residential building does not solve the housing issue (secondary building) and amounts to 0.3%-1.5%.

In the case of illegally built buildings, this tax is 0.3%-1.5% if it solves the housing issue, and if not, then it is 0.3%-2%.
In the case of undeveloped construction land, the tax is 0.3%-5%.

The procedure for obtaining a construction permit is simplified.

After urban planning – technical conditions, a preliminary project is made, for which the city architect must give his consent. Then the main project is made, which is sent for revision. The auditors audit the project and collect the rest of the documentation, in order to sign the contract on compensation for the construction land. After everything, the construction application is made.

In the last 18 months, there has been an increase in interest in buying real estate in Montenegro, the market is extremely active, perhaps the most active in the last 15 years or so. A combination of low interest rates and fears of inflation have been the main drivers for buying in Montenegro over the past 12 months as real estate is a safe investment.

The growth of interest is accompanied by the growth of real estate prices, so it can be said that prices have jumped from 15 to 25% in the last year. In addition to the increased interest, the jump in the price of construction materials also influenced the growth of real estate prices in Montenegro.

The combination of rising Interest rates, recession in economic development and political instability will certainly affect demand and real estate prices. But in the long run, investing in Montenegro pays off, telegraf wrote.

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