Over the past four years, foreigners have purchased real estate in Montenegro worth 1.5 billion euros. According to data from the Central Bank of Montenegro, interest in the local market remains high, but is gradually declining. In 2021, foreigners bought real estate worth 278 million euros, in 2022 — 448 million, which is 60% more, and in 2023 the volume of purchases amounted to 463 million euros, which is only 3.3% more than in 2022.
Key figures:
- In 2021, buyers spent 278 million euros.
- In 2022, interest increased by 60% — 448 million euros.
- In 2023, the amount was 463 million euros.
- In 2024, over 11 months, foreigners purchased real estate worth 398 million euros.
Real estate sales by foreigners in Montenegro also remains a relevant topic. Over the past four years, they sold property worth 421 million euros. In 2021, this figure was 72 million euros, in 2022 — 108 million euros, in 2023 — 134 million euros, and for the first 11 months of 2024 — 107 million euros.
Foreigners purchased two-thirds of the real estate
In the first 11 months of 2024, banks in Montenegro issued housing loans worth 156 million euros, and despite loans to local citizens and companies, foreigners accounted for about two-thirds of property buyers in the country. This confirms the high interest of foreign investors, especially in the context of rising housing prices.
Real estate prices: overvaluation and expectations
The Ministry of Finance of Montenegro, in its Economic Reform Program, stated that real estate in the country is overvalued due to the growth of foreign investment. In the coming years, a slow decline in housing prices to their fair value is expected. The average price per square meter in new buildings in the third quarter of 2024 was 1,853 euros, which is significantly more than 1,192 euros per square meter in 2020.
Dynamics of foreign investment
The inflow of direct foreign investment into Montenegro's real estate sector since 2021 has amounted to about 6.4% of the country's GDP annually, which is much higher than the 3.5% figure for the period from 2015 to 2020. This increase is linked to the growing interest of foreigners in real estate, rather than to higher objective costs.
Citizens of Serbia, Russia, and Germany are the leaders in purchases
Over the past four years, the largest amounts in Montenegro real estate were invested by citizens and companies from Serbia — 230 million euros. In second place are Russians with 210 million euros. In recent years, interest from Russian and German investors has noticeably declined. In contrast, citizens of Turkey have shown growing interest, increasing their investments from 14.7 million euros in 2021 to 56.2 million euros over the first 11 months of 2024.
Trends in foreign investment in Montenegro:
- Declining interest from Russians and Germans.
- Growing interest from buyers from Turkey and other countries.
- Serbia remains the largest investor in Montenegro real estate.
- Minimal impact of objective costs on real estate price growth.
Changes in the real estate market and the growing importance of service quality
Given the anticipated changes in Montenegro's real estate market, investors and buyers are likely to pay more attention to the quality of services provided. In the context of slowing price growth and a gradual decline in interest from some foreign citizens, the key factor in the purchase decision will be not only the price, but also the level of service. Demand for professional advice, quality assistance in selecting real estate, as well as support with legal and financial matters will increase. This means that companies offering comprehensive services in property selection and business operations will be able to stand out from competitors by providing clients with additional guarantees and confidence in their decisions.
In the coming years, buyers will pay more attention to factors such as the reliability of agencies, transaction transparency, the ability to obtain information about the legal status of the property, and the terms for obtaining mortgage loans. Therefore, the development of professional and high-quality services aimed at helping with investment and property acquisition will become an important competitive advantage for players in Montenegro's real estate market. It is important to understand that in the new economic conditions it will be much more significant not just to “buy” a property, but to do it correctly and with minimal risks, — Vyacheslav Maevsky, founder of the real estate agency MD Realty.
Conclusion:
Over the past few years, Montenegro has attracted significant investment into the real estate market, which has affected price growth. Despite the slowdown in the growth of foreign investor interest, the market continues to remain attractive for purchases. In the coming years, a gradual decline in real estate prices is expected, which opens up additional opportunities for investors. Source. Image: pexel.com