Record Low Number of Building Permits in Montenegro in 2025: What Is Slowing the Sector and Why Prices Keep Rising
In Montenegro, only 174 permits and construction notifications for residential housing were issued in the first six months of 2025 — the lowest figure in the past 20 years. Experts are convinced that this is not due to falling demand, but to changes in legislation that came into force...
In Montenegro, during the first six months of 2025, only174 permits and notifications for residential construction were issued— this isthe lowest figure in the past 20 years. Experts are confident: the reason is not a drop in demand, but changes in legislation that came into force in March this year.
Why are fewer permits being issued?
According to the Construction Committee of the Chamber of Commerce,the key reasonfor the decline in activity is the introduction of mandatory
construction permits
instead of the previous simplified notification procedure for starting works, which had been in place since 2017.Since March 2025, part of the authority to issue permits has been transferred to municipalities, but local administrations have been given a transition period to establish the relevant departments. It is this temporary “restructuring of the system” that led to the sharp drop in the number of documents issued.Comparison with previous years
In Q1 2025, 30 permits were approved (117 apartments).In Q2, only 10 (57 apartments).For comparison: during the pandemic, in Q1 2021, construction was approved for 86 apartments, and in the first half of the year alone — 324, which is twice as much as now.The record was set in 2017 — 1,649 apartments in the first half of the year, almost ten times more than in 2025.
What is happening with prices?
Despite the slowdown in construction,housing pricescontinue to rise
.
The average price per square meter of a new-build apartment in Q2 2025 was
almost €230 million. In addition, mortgage lending also increased — €126.5 million compared with €100.6 million a year earlier.
Read also: Guide to Buying Property in Montenegro in 2025: Step-by-Step Instructions with Examples and Case Studies
Forecasts and expectations
Market experts note that houses approved in previous years are currently being completed in Podgorica and other cities, so the slowdown in construction will become more noticeable in 1–2 years.
The Construction Committee emphasizes that an objective assessment of the situation requires waiting for the results of the next quarters. Nevertheless, it is already clear that planned construction volumes are shrinking: in 2023 — 148,000 sq. m, in 2024 — 103,000 sq. m. This signals a slowdown in activity, but not a complete withdrawal of investors.
Read also: Montenegro Real Estate Market Analysis: Where Is It More Profitable to Buy in 2025
Conclusion
Montenegro has faceda record drop in the number of new housing projects
, but the real estate market remains “overheated” due to strong interest from foreigners. Legislative changes and the transfer of powers to the local level have temporarily slowed construction, but demand continues to push prices upward.
For buyers and investors, this means: the choice of new-build properties will be limited, and housing prices are unlikely to fall in the near future.
