The Montenegrin Real Estate market hit a high in 2007 and has remained active since then.
Montenegro’s accession to NATO in 2017 contributed to the rise of the curve of the real estate market again due to the growing interest of foreigners, attracted by additional security for their investments, low tax rates, and positive business practice.
In the first half of the last decade, interest in Montenegrin real estate was focused on the purchase of houses and apartments, while in the second half investors focused on large investment projects such as luxury tourist resorts and hotels, including, most notably, the Porto Montenegro, Lustica Bay, and Portonovi projects.
The Real Estate business picked up in 2019 due to the new Economic Citizenship Program, allowing individuals to obtain Montenegrin passports. The program, which started in January 2019, will help the national economy grow by attracting wealthier investors interested in Montenegrin citizenship. The project is also designed to develop the northern and mountainous part of the country by speeding up the construction of high-class hotels currently missing from the area. Therefore, the Economic Citizenship Program can be only a winning combination for both investors and Montenegro.
The ECP program, like the above-mentioned large investment projects, provides additional incentives for foreign investors and generates interest in independent properties like old stones houses or apartments in small residential buildings along the beautiful coast. There is also significant interest in exclusive, small plots of land on the coast, where the building of villas for individual housing has been permitted.
The lockdown of most countries caused by the COVID-19 crisis has resulted in a freeze of the development of Montenegro’s Real Estate market, causing a total crash of the summer tourist season in 2020. In the fourth quarter of 2020 Montenegro started easing the restrictive measures, including those related to the entry of foreigners into Montenegro. This immediately led to the return of interested investors, and the Real Estate market began to revive. Indeed, despite the difficulties caused by the COVID-19 crisis, work on already-started projects continued, and some new projects were even launched.
Despite the impact of COVID-19, Real Estate prices have not fallen significantly, because it is expected that development in real estate will return, faster and more efficiently, immediately after stabilization. Information concerning the development of projects in the Real Estate sector, and our personal experience in the field, reveal that real estate development is really amazingly active despite the crisis. For example, one major project (which our office is involved in as local legal adviser) involves the development of a residential tourist resort on the seaside, which started in October 2020, and which is moving forward aggressively.
It is not simply optimism, but fact, that Montenegro will become even more popular and attractive with the continued development of its Real Estate in the near future.
By Jelena Vujisic, Partner, Law Office Vujacic
This Article was originally published in Issue 8.2 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.