Buying an apartment for the majority of citizens this year will be an almost impossible mission. While bankers announce a slight decrease in interest rates on housing loans from the middle of the year, builders and real estate agents believe that apartment prices will not change significantly.
If you wished on New Year’s Eve to solve your housing issue in 2024 because you haven’t been able to do so due to high prices, it is unlikely that your wish will come true without a hefty wallet. Confirming this are projections from real estate agents, as well as builders.
- Before, there was a belief that there would be a slight cooling in the market, a slowdown in price growth, and less demand, but I don’t believe that there will be a significant drop in prices in any substantial amount – said Mile Gujić from the Association of Builders.
- I assume that we have now reached a level where these prices will at least stay in the medium term, and if there are any changes, it will be a slight decrease in prices. The reason is still high demand – emphasizes Stefan Mišković from a real estate agency.
Since the outbreak of the war in Ukraine, 100,000 foreigners have come to our country who are much wealthier than the average Montenegrin citizen, especially on the coast and in Podgorica. Thus, the average price per square meter in the capital has increased by almost 500 euros, so for an apartment of 50 square meters, you now need to set aside almost 25,000 euros more than before 2019.
- At that time, the average price in Montenegro was 1,160 euros, and compared to today, it was 42% lower, and when it comes to Podgorica, it was at the level of 1,180 and compared to today, or the third quarter of 2023 when we have the last official data from Monstat, it was 44% lower – says Mišković.
In addition to demand, the rise in real estate prices has been influenced by inflation, as well as disruptions in the market for construction materials, especially during the coronavirus pandemic, and later the war in Ukraine. However, the opposite trend is happening now.
- In the last couple of months, there has been a stabilization in the market for construction materials and products, and some prices have even fallen. However, it was not enough for real estate prices to return, or to fall. Here, there is a small supply, and in Montenegro, an average of no more than 3,000 apartments is completed, and with that number of built apartments, the market that now expresses a great need and great demand cannot be satisfied – added Gujić.
In parallel with the rise in apartment prices, interest rates on housing loans have also increased. Borrowing for the purchase of an apartment from 2019 to today is almost 2% higher. In the year ahead, as bankers predict, citizens can count on slightly more favorable loan conditions.
- In the first two quarters, I do not expect any significant drop in interest rates, primarily of Euribor. We can expect a certain drop from the June conference – said Bratislav Pejaković from the Association of Banks.
However, all of this will not mean much to tenants because rents have almost doubled, and in some locations in the capital and on the coast, they are even 100% higher. Therefore, the realization of the New Year’s wish of most citizens to solve their housing issue will have to wait for better times.
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