Who Are the Buyers of Montenegrin Real Estate?

Interview for the portal Standard.

Tatjana Pejanović, the owner of the real estate agency "Team Real Estate," emphasizes that real estate prices in Montenegro have significantly increased in recent years, particularly in urban and coastal areas. "In Podgorica, for example, the increased demand for residential units and commercial spaces has led to a significant rise in prices," explains Pejanović, adding that coastal destinations like Budva, Tivat, and Kotor have also seen a similar trend due to tourist interest and attractive offerings.

However, this growth has not been without challenges. "The lack of clearly defined laws and regulations, as well as the absence of standardization in the sector, makes it difficult for agencies to operate and creates legal uncertainty," Pejanović points out. This situation complicates the establishment of professional norms and procedures, further complicating the real estate business.

One of the key factors that could significantly impact the real estate market in the near future is the introduction of new taxes. "Higher taxes could discourage potential buyers, especially those purchasing real estate as an investment," warns Pejanović, stressing that this could lead to a slowdown or a decrease in demand, particularly among local buyers who are already feeling the pressure of rising living costs.

On the other hand, foreign investors continue to show significant interest in Montenegrin real estate, accounting for 30-40% of all transactions.

"The largest investors come from Turkey, Russia, Serbia, but also from Western European countries like Germany and the United Kingdom," says Pejanović. According to her, this foreign interest significantly stimulates the rise in real estate prices, particularly in tourist-attractive areas, but also in urban centers like Podgorica, where there is growing demand for residential and commercial spaces. This fact indicates that despite economic challenges, Montenegro remains an attractive destination for foreign capital investors, which further drives the rise in real estate prices, especially in tourist destinations.

Tourism, as one of the main drivers of the economy, has a significant impact on the demand for real estate, especially in coastal regions.

"The increase in the number of tourists directly impacts the growing interest in properties that can be used for tourism purposes, as well as those that provide opportunities for long-term investments in the tourism sector," says Pejanović. Properties like apartments and luxury villas are especially popular among foreign buyers who are looking for luxurious vacation homes or long-term investments.

However, the lack of adequate infrastructure and bureaucratic barriers pose significant challenges for further market development.

"The absence of a unified law that precisely regulates the real estate sector leads to inconsistencies in operations among agencies and makes it difficult to establish professional norms and procedures," warns Pejanović. She also adds that additional investments in infrastructure are needed, particularly in less developed areas, in order to support market growth and increase the attractiveness of certain locations.

Looking ahead, Pejanović believes that the forecasts for the real estate market in Montenegro are optimistic, but only if current challenges are addressed.

"We expect the market to continue to grow, especially with Montenegro's expected EU accession," she says, adding that EU membership could bring greater economic stability and more favorable investment conditions, further stimulating the real estate market.

In light of economic changes and rising living costs, the Montenegrin real estate market is facing a crucial question: How can it sustain growth and attract new investments amid pervasive uncertainty? "The answer, it seems, will depend on the state's ability to adapt its legislative framework and investment policies to create more favorable conditions for both domestic and foreign investors," concludes Pejanović.

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