Montenegro’s Property Market: Prices & Trends in 2021

The Montenegro property market is an interesting one for those looking to relocate. It has the potential of offering that ideal combination of discounted prices now and appreciating value in the future.

There are a few complementary factors driving Montenegro property prices upwards. Generally, they are all related to drawing foreign capital and people into Montenegro’s real estate market.

This article delivers a snapshot view of the Montenegro real estate market in 2021 with a look at where it’s going in the future.

Overview of Factors Driving Property Prices in Montenegro

The positive Montenegro real estate report is supported by four main details:

  1. Since gaining independence in 2006, Montenegro has had a stable government that prioritizes investment, tourism and immigration.
  2. The natural environment combined with that stability has attracted a huge amount of foreign investment to develop hotels and resorts.
  3. The Montenegrin government recently added buying a property as an easy fast track to a residence permit.
  4. The country’s relative proximity to Russia, Turkey and the Middle East means there is a diversified mix of foreigners who want to join the real estate market in Montenegro.

While nothing is guaranteed in real estate, the Montenegro real estate trends are definitely positive. Doubly so for properties right along the Dalmatian coast.

Montenegro Real Estate Trends Since 2008

Like other countries popular with expats and those in the market for second homes, Montenegro was hit hard by the Global Financial Crisis of 2008-09. By mid-2009, house prices had fallen 20 to 30 percent from their pre-crisis peak.

Luckily for those selling land and those developing it, Russian buyers stepped in to purchase lots where they could build second homes. In the last decade, this eastern interest has combined with the general economic recovery to support an upward trend in Montenegro real estate prices.

Recent Economic Indicators

In 2013, the World Bank published a report called Preparing for Prosperity. It noted that Montenegro tripled its per capita income over a decade and stood as the most affluent country in the western Balkans.

Generally, signals have been positive from the Montenegrin economy over the past five years. GDP has grown (by as much 6%) in every quarter since the start of 2013. Gross wages have grown by almost 20% since mid-2015 and consumer-price inflation has been contained under 3%.

Job creation is the only missing piece. The unemployment rate reached a recent record at over 22% in early 2017 and has only pulled back slightly since then.

So far, supply has more than kept up with demand and foreign investment looks to keep it that way.

When I originally wrote this article in 2019, I never could have predicted a global pandemic shutting down all international travel. Despite this however, Montenegro has seen unprecedented demand after the initial “pause” in mid-2020.

Tourism’s Effect on Real Estate Prices in Montenegro

Sensibly, many people who relocate to a country visit it as a tourist first. And similarly, many tourists think “I could live here full time”.

Many of them follow through.

With billions of dollars flowing into tourism construction projects, Montenegro is expecting many more visitors and some of them will end up staying.

Where Are Property Prices in Montenegro Affected?

The land ringing the Bay of Kotor is the most popular with hotel and vacation rental developers. (It gets billed as Europe’s southernmost fjord.) The ocean views and various outdoor pursuits are equally attractive if you plan to live there year round.

For instance, Qatari Diar is spending 250 million Euros to build an expansive resort complex in Tivat.

Especially in places like Kotor, tourism has had a noticeable effect on Montenegro's real estate prices.
Especially in towns on the Bay of Kotor, tourism has had a noticeable effect on Montenegro’s real estate prices.

On one hand, this interest makes it tough to find cheap property in these parts of Montenegro. But on the other, there is likely to be more demand here when it comes time to sell.

The demand for space and the potential to earn vacation rental income means that it’s not uncommon to see high prices in places like Tivat. There, a 550 sq. ft. new-build apartment with a sea view could easily be listed for €120,000

Is All of Montenegro This Way?

Far from it. Keep in mind that Montenegro’s border with Serbia is about 250 km from the coast. Nearly a third of the population lives in the capital, Podgorica. It’s fairly spread out with about 150,000 living in the urban center and another 35,000 in the surrounding metro area.

That means a small house (800 sq ft) in a new subdivision might go for as little as €60,000. The Podgorica property price range extends up to about €350,000 for a 3,750 sq. ft. renovated villa in an attractive neighborhood.

Further into the interior, Niksic is Montenegro’s second largest town. There, a modest house (1,000 sq. ft.) might be listed for as little as €70,000.

The Montenegro Commercial Property Market

If you’re thinking that Montenegro would be a great place to relocate to as an entrepreneur who wants to start their own business, you’re right. But, as with finding a place to live (rather than rent for a week or two), the challenge will be sifting through the tourism-related listings.

The CentreVille hotel complex is part of the commercial real estate development boom going on in Podgorica.
The CentreVille hotel complex is part of the commercial real estate development boom going on in Podgorica. Photo: d*oraz, CC BY-SA 2.0

Especially if you’re searching in English it will seem that all anyone wants to sell (or rent) are disused hotels and small blocks of vacation apartments.

Particularly in Podgorica, commercial real estate is becoming more readily available. By halfway through 2017, there was over a million square feet of Class A and B office space (up from 640,000 sq. ft. in 2012.)

Future Trends

Nearly two decades of economic success is an impressive run.

Real estate prices have gone up as incomes have grown and foreigners have arrived in large numbers. The Montenegrin economy continues to grow its tourism sector and that will probably support a strong real estate market, especially on the coast.

The only grey cloud on the horizon is the possibility that the Montenegro real estate market may become overheated if supply can’t keep up with demand.

This question will probably hinge on whether the country continues to attract foreign investment to support development.

Montenegro’s Real Estate Market in a Nutshell

Montenegro is wonderful (and increasingly popular) place to live. Especially since buying property guarantees a residence permit, those relocating here will continue to watch the real estate report for Montenegro.

Do you still have questions about the Montenegro property market? Get in touch and I’ll walk you through everything you need to know.