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Thursday, May 23, 2024
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Montenegro real estate market adjusts as foreign demographic shifts

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Over recent years, Montenegro has emerged as a sought-after destination for many foreigners, particularly Ukrainians and Russians, who flocked to our coastline in significant numbers following the outbreak of war. However, a shift in the real estate market is now evident, particularly in rental rates, with a notable decrease due to the departure of nearly one-third of Ukrainians and half of Russians.

Conversely, the situation in Podgorica remains stable, if not showing signs of rental price growth, especially in the City Quarter. Despite the departure of foreign nationals, property prices have not decreased proportionally, though a decline in apartment rentals along the coast has been observed since the start of this year, with a significant drop anticipated post-tourist season.

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Rental prices for apartments soared when the conflict in Ukraine began. Winter saw store sales matching summer peaks, bringing satisfaction to restaurant owners. However, over recent months, particularly since last season’s end, the Ukrainian population has steadily declined, leading to reduced spending, notably in Budva.

Many affluent Ukrainians rented apartments and houses in Budva, hoping for a swift resolution to the conflict. Today, numerous have returned home or relocated to other countries, mainly in Western Europe and Canada, having found limited opportunities for business or employment in Budva, depleting their savings in the process.

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According to the Budva Tourist Organization, which recorded the highest influx of Ukrainian nationals in 2022, their departures were evident as early as November last year.

“Since November, we’ve seen about a 30% decrease in Ukrainian nationals in Budva. In 2022, around 38,000 Ukrainians visited Budva, dropping to about 32,000 in 2023. Similarly, there has been a 50% reduction in Russian nationals, with departures aligning closely with Ukrainians,” stated the Budva Tourist Organization to Pobjeda.

In place of Ukrainians and Russians, there has been a notable influx of Turkish nationals.

Dušan Ranković, Honorary President of the Association of Real Estate Agencies, notes that rental prices for coastal apartments have been decreasing since the year began.

“Previously, apartments in Budva rented between 800 and 1,000 euros. Now, larger units can be found at similar prices, while smaller ones, which used to cost between 600 and 700 euros, are now available for 400 euros or even 350 euros. Turkish nationals, however, are maintaining prices, primarily seeking land for joint constructions. Yet, attractive land options are rare, particularly along the Budva Riviera,” stated Ranković.

However, he underscores a lack of available land, particularly concerning the Budva Riviera.

“In sought-after locations, options for potential buyers are limited. Budva’s coastal areas already boast numerous hotels, satisfying existing demand. New hotels continue to spring up, while the situation with apartments differs. Supply is scarce, and prices are steep,” explained Ranković.

Regarding rentals, prices have dipped since the year’s start due to the Ukrainian exodus, with further declines anticipated post-peak tourist season.

“In anticipation of peak season, many are holding off. Budva is inundated with short-term rentals, but with the season condensed to just a month, earnings are lower. An increase in rental property availability is expected post-peak season, likely leading to further price declines,” concluded Ranković.

In Podgorica, both rental and sales prices are on the rise, even amid the departure of Ukrainians and Russians.

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