Tatjana Pejanović, owner of the real estate agency „Team Real Estate,“ emphasizes that property prices in Montenegro have significantly increased in the past few years, especially in urban and coastal areas. „In Podgorica, for example, the increased demand for residential units and commercial spaces has led to a significant price hike,“ explains Pejanović, adding that coastal destinations like Budva, Tivat, and Kotor have also experienced a similar trend due to tourist interest and attractive offerings.
However, this growth is not without its challenges. „The lack of clearly defined laws and regulations, as well as the absence of standardization in the sector, make it difficult for agencies to operate and create legal uncertainty,“ highlights Pejanović. This situation hinders the establishment of professional norms and procedures, further complicating operations in the real estate sector.
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 can discourage potential buyers, especially those purchasing properties as investments,“ warns Pejanović, emphasizing that this could lead to a slowdown or decline in demand, particularly among domestic buyers who already feel the pressure of rising living costs.
On the other hand, foreign investors continue to show significant interest in Montenegrin properties, accounting for 30-40% of total transactions. „The largest investors come from Turkey, Russia, Serbia, as well as Western European countries like Germany and the United Kingdom,“ notes Pejanović. This interest from foreign buyers, according to her, significantly fuels the rise in property prices, especially in tourist-attractive areas and urban centers like Podgorica, where there is a growing demand for residential and commercial spaces. This fact indicates that, despite economic challenges, Montenegro remains an attractive destination for foreign capital investors, further stimulating the rise in property prices, especially in tourist-attractive areas.
Tourism, as one of the main drivers of the economy, has a significant impact on the demand for properties, especially in coastal regions. „The increase in the number of tourists directly influences the 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 popular, especially among foreign buyers looking for luxurious vacation homes or long-term investments.
However, the lack of adequate infrastructure and bureaucratic obstacles pose significant challenges for further market development. „The absence of a unified law that precisely regulates the real estate sector leads to inconsistency 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 necessary, especially in less developed areas, to support market growth and increase the attractiveness of certain locations.
Looking towards the future, Pejanović believes that the forecasts for the real estate market in Montenegro are optimistic, but contingent on resolving current challenges. „We expect the market to continue growing, especially with the announced entry of Montenegro into the European Union,“ she says, adding that EU membership could bring greater economic stability and favorable investment conditions, further boosting the real estate market.
In light of economic changes and rising living costs, the real estate market in Montenegro faces a key question: how to sustain growth and attract new investments in conditions of pervasive uncertainty? „The answer, it seems, will depend on the state’s ability to adjust its legislative frameworks and investment policies to create more favorable conditions for domestic and foreign investors,“ concludes Pejanović.
Source (cover photo): Provided photo.