Over the past four years, foreigners have purchasedreal estate in Montenegroworth 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 property worth 278 million euros, in 2022 — 448 million euros, 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 reached 463 million euros.
- In 2024, over 11 months, foreigners purchased real estate worth 398 million euros.
Foreigners purchased two-thirds of the real estate
Over 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 strong interest of foreign investors, especially in the context of rising housing prices.Real estate prices: overvaluation and expectations
The Ministry of Finance of Montenegro stated in its Economic Reform Program 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 developments in the third quarter of 2024 was 1,853 euros, significantly higher 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% recorded in the period from 2015 to 2020. This increase is linked to growing foreign interest in real estate, rather than to rising objective costs.Citizens of Serbia, Russia, and Germany are the leading buyers
Over the past four years, the largest amounts invested in Montenegro’s real estate came from citizens and companies from Serbia — 230 million euros. Russia ranks second with 210 million euros. In recent years, interest from Russian and German investors has noticeably declined. In contrast, Turkish citizens have shown growing interest, increasing their investments from 14.7 million euros in 2021 to 56.2 million euros over 11 months of 2024.Foreign investment trends in Montenegro:
- Declining interest from Russians and Germans.
- Growing interest from buyers from Turkey and other countries.
- Serbia remains the largest investor in Montenegro’s 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 expected changes in Montenegro’s real estate market, investors and buyers are likely to pay closer attention to the quality of services provided. In conditions of slowing price growth and a gradual decline in interest from some foreign buyers, the key factor in the purchasing decision will be not only price, but also the level of service. Demand for professional advice, high-quality assistance in selecting property, as well as support with legal and financial matters, will increase. This means that companies offering comprehensive real estate and business services will be able to stand out from competitors by giving clients additional guarantees and confidence in their decisions.QuoteIn the coming years, buyers will pay more attention to factors such as the reliability of agencies, transaction transparency, access to information about the legal status of property, and the conditions for obtaining mortgage loans. Therefore, the development of professional and high-quality services aimed at helping with investments 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 significantnot just to “buy” a property, but to do it properly and with minimal risks,” commented Vyacheslav Mayevsky, founder of the real estate agencyMD Realty.