Montenegro’s Real Estate Market: Something for Everyone
Over the past 15 years, local real estate practitioners have enjoyed watching Montenegro emerge as a key second-home and property-investor market in the Mediterranean. As a testament to this, in 2018 the mixed-use projects of Porto Montenegro and Luštica Bay recorded the strongest sales-absorption rates in the region. Montenegro is punching well above its weight, and successfully so. One of the reasons for this is Montenegro’s ability to cater to everyone: investors can choose from glamorous seaside resorts, to quaint waterfront houses, to new establishments servicing increasingly popular mountain and ski areas in the north.
For those who prefer the coast, the spectacular fjords are being transformed into a high-end destination that is attracting ultra-high-net-worth individuals seeking primary and second homes discerning investors with sharp eyes for potential. Investors are looking keenly to the future, considering how Montenegro will have evolved in five to ten years and banking on strong price growth and increasingly attractive yields. Over the coming years, more than EUR 5 billion will be invested into high-end resort projects in this region and will include new mixed-use projects such as Montrose (by Kuwait-backed company Northstar), Plavi Horizonti (by Qatari Diar), and Portonovi (by Azmont), which is set to be launched this year.
The eagerly awaited Portonovi luxury resort and mega-yacht marina, which will bring a new level of lifestyle elegance to Montenegro, will be home to the first One&Only hotel in Europe, set to open in 2020. Speaking at the laying of the first foundations, Milo Djukanović, then Prime Minister of Montenegro, said: “Today, we proudly begin a new phase of Portonovi that is to be our pride — for Montenegro, its citizens, and investors.” In Portonovi, clients can purchase apartments starting at EUR 400,000 and One&Only villas starting at EUR 5 million.
The new town of Luštica Bay was voted ‘Best European Property Development’ by the Luxury Network Group in February 2019. One of the more distinct features of the town is its laid-back resort atmosphere. There is also the recently opened five-star hotel The Chedi Luštica Bay and a marina; a world-class golf course in a spectacular location will open soon. Investment options in Luštica Bay vary from reasonably priced apartments of around EUR 200,000 in the town center to impressive villas close to the marina from EUR 2 million. This new town is said to be leading a luxury real estate revolution in the country.
Porto Montenegro, which was recently purchased by the Investment Corporation of Dubai and has become a globally renowned village, has arguably set the scene and standard for resort and marina living in the country. This fully up-and-running marina town continues to offer excellent real estate investment opportunities and the chance to live a premium-quality life characterized by first-class dining and shopping options. The Regent Porto Montenegro in Montenegro village is one of the finest hotels in Europe. It has worked to improve the profile of visitors to the area and, by extension, the value of the properties therein. Here, investors are paying from EUR 300,000 for smaller apartments and over EUR 4 million for penthouses. Since Porto Montenegro’s launch in 2013, over 300 units have been sold.
Tivat town, which is located in the Bay of Kotor, has enjoyed significant transformation on the back of the success of Porto Montenegro and has seen property prices increasing to become the highest on the coast. Around Tivat, a one-bedroom apartment retails from about EUR 100,000.
Similarly, the magnificent old town of Kotor, which is surrounded by fortifications built during the Venetian period, is a major attraction on the Adriatic coast. New projects in the pipeline, close to the town, will offer fine new condo-hotel options that will no doubt appeal to discerning travelers. Apartments around the town are on the market from EUR 100,000 for single-bedroom units.
While the popular fjords offer culture, history, and spectacular scenery, the Budva Riviera is known for wonderful beaches and a bustling nightlife. The area continues to attract significant investor interest, and new mixed-use projects on the go will elevate the riviera to world-class status. Budva remains the most attractive town for investors, with over 1,000 units changing hands in 2018. Here, apartment pricing begins at roughly EUR 80,000 and climbs to EUR 600,000. On the commercial property front, 2018 marked an impressive year: in key locations property sold at record levels, continuing to mark the town as a preferred location for businesses. Typically, rates for commercial premises start at EUR 3,000 per square meter.
For investors seeking a getaway from the coast, a good option is to head north. The mountain towns of Kolasin and Zabljak are as popular in summer as they are during the ski season. A new motorway currently under construction will bring the area within two hours of the coast. Each year, new infrastructure investment is added to the ski resorts and the area is quickly making a name for itself in the region. The announcement this January that the area is included in Montenegro’s new citizenship-by-investment (CBI) program will catapult investment into its mixed-use resorts. Houses are currently on the market from EUR 125,000, and smaller apartments from EUR 50,000. New projects soon to be released will offer high-end ski-in, ski-out apartments from EUR 250,000, strategically matching the entry requirements of the CBI offering.
2018 saw strong interest and growth in the market. Sales were recorded in all property brackets — be it a EUR 50,000 apartment in Herceg Novi or a EUR 10 million villa in Kotor Bay — and we expect 2019 to be another record year, with continuing interest from investors. More and more investors with strong interest are coming from the Middle East and Western Europe and from Commonwealth of Independent States countries. The launch of the CBI program is set to further bolster the local real estate market and promote diversity among investors.
Whether it is a studio hideaway, a quaint mountain retreat, a sophisticated apartment in a new marina town, or a waterfront mansion, Montenegro has something for everyone when it comes to second homes and investing.