The Property Banks Montenegro Property News
Montenegro Property Prices Just Keep Rising,
BIRN, Serbia - 6 Jul 2007
Distinguishing hyperbole from genuine promise can be difficult in
the fast-growing market for holiday properties in Montenegro.
Some local real estate watchers, their spirits buoyed by growth
rates as high as 200 percent since 2004, no longer compare
Montenegrin real estate merely to similar offers in neighbouring
Croatia. Instead, they compare directly with Mediterranean region’s
most glittering resort destinations.
“Montenegro is small, and it lacks space for developers. As it moves
towards the European Union, prices will go sky high. In Monte Carlo,
one square metre of an apartment costs 100,000 euros,” says Predrag
Drecun, an economic analyst.
In fact, price parity with markets like Monaco’s elite quarter is a
long way off, Drecun acknowledges. His own projection foresees the
price of a square metre of seaside residential property reaching
between 7,000 and 10,000 euros.
However, the fact that Drecun mentions Montenegro and Monte Carlo in
the same breath is exceptional in itself. Half a decade ago, the
former Yugoslav republic was still submerged in the complicated
politics of its union with Serbia, mostly undiscovered by foreign
property speculators.
Now with foreign buyers’ rapid entry since 2004 shocking the scene,
sellers, buyers and analysts are all scrambling to figure if and
when the boom will end.
A survey by Colliers International shows that property transactions
increased in volume by 400 percent over the past two years already,
but most experts answer that there is plenty of room left to grow.
In exceptional cases, prices already exceed Drecun’s projection. But
entry level prices for residential space in coastal hotspots like
Kotor, Budva and Herzeg Novi generally remain far below this level,
from 2,000 to 4000 euros per square meter, according to local
agents. Before the last years’ boom, a typical entry price was 1,000
euros.
“Montenegro is very interesting in the long run, and it’ll be
increasingly interesting for investors in the next ten, fifteen
years,” says Sasa Dedeic, chief of Interspar, a real estate agency.
Dedeic rests his forecast partly on a claim that “the quality of
life in Montenegro will be better than anywhere else in Europe”,
predicated like many optimistic assessments of the market on the
country’s new integrationist path in relation to the European Union.
Such claims are supported by bullish analyses from outside, as well,
such as a prediction from the London-based World Travel and Tourism
Council (WTTC) that Montenegro over the next decade will experience
the fastest tourist industry growth of any country.
Spill-over destination
Whether or not the EU angle bears itself out, Montenegro is now
undeniably a spill-over destination for investment capital in
booming real estate markets elsewhere in both western and eastern
Europe.
The bulk of foreign demand seen since 2004 has originated in the
United Kindom, Ireland and Russia – all markets where property
values are trending upward sharply – and there is no sign of a
slowdown.
According to the finance ministry, foreign buyers in 2006 spent 750
million euros on purchases of land and apartments, a figure equal to
45 per cent of Montenegro’s gross domestic product.
Vera Kirovic, owner of the V&K Svetionik estate agency in Bar, the
largest coastal town, says prices for land change “literally by the
hour”.
Such rapidity of growth is driven by a shortage in supply, with
views and access to the seacoast proving the most powerful driver of
demand. In and around Bar, land prices go as low as 10 euros per
square metre for inland property outside the area covered by the
official urban plan. For land near the see, prices go up to 350
euros.
For new apartments, prices rise further to 2,500 euros, Kirovic
says.
In prime markets near the sea, such as Sveti Stefan, land prices go
as high as 450 euros per square metre, according to the Colliers
International survey.
Sasa Vukicevic of Dream Property Montenegro, an agency that serves
mostly British clients, likewise points to a huge disparity in
seaside and inland prices, which he says reflects the aims of
English buyers.
Even as coastal prices rise rapidly, land in villages on the slopes
of mountains like Rumija and Lisinja starts at just five euros per
square metre.
Domestic price pressure from the coast has been quicker to spill
over into Podgorica, the capital, where a square metre of
residential property now hits the market at between 1,700 and 3,000
euros.
Mitigating risk
Despite the remarkable price growth seen to date, buyers still run
risks. Lawyers specialising in real estate issues warn that
Montenegro, sometimes despite appearances, remains a hornets nest of
complicated property issues. Naïve entrants sometimes get stung.
“Any purchase of a property may turn out to be a double-edged sword,
which is why additional checks are needed,” says Dedeic, the
Interspar chief.
“A buyer can purchase a holiday house somewhere only to find out
that the municipal detailed urban plan designates the location for a
hotel or an office building,” he says.
Aleksandar Djurisic, a Podgorica lawyer who represents foreign
buyers, cites a long list of potential pitfalls: sellers who lack
paperwork proving ownership, unresolved disputes within restitution
processes not yet run to completion and questions regarding
inheritance proceedings before the courts.
“Professional legal aid is needed from the very beginning. If all
the checks are done well, there will be no negative consequence for
an investment,” Djurisic says.
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Celebrities, sun-seekers fuel Montenegro property boom, South
Asian Women's Forum, India - 28 Jun 2007
KOTOR, Montenegro (AFP) - Investment speculators led the influx,
snapping up houses, apartments and plots of land wedged between
Montenegro's craggy mountains and its glimmering Adriatic coastline.
But, with the speculators having moved on to Albania after arriving
from Croatia, the buyers today are a mixture of foreigners -- mainly
Russians, Britons and Irish citizens -- looking for a place in the
sun.
"When my son decided to buy a flat in Montenegro, I didn't even know
where it was, but it sounded exotic," said Margaret Hodgson, who
moved with her husband to the Bay of Kotor last year from a town
near York, in northeastern Britain.
"So we came down to spend a week here, and decided to buy a flat
too. Here in the bay it is fabulous. We like the people and the food
is excellent," said the tanned Englishwoman, beaming with a smile.
Along with Budva, Kotor's old city -- which is listed as world
heritage site by the UNESCO (UN Educational, Scientific and Cultural
Organisation) for its well-preserved medieval structures -- is one
of the most popular tourist destinations in Montenegro, situated in
a secluded part of a gulf described by some as Europe's southernmost
fjord.
Other major attractions include the iconic island of Sveti Stefan,
which features luxurious stone houses whose guests have included
film stars such as Elizabeth Taylor and Sylvester Stallone.
In January, Sveti Stefan's famed hotel was leased out for 30 years
to Singapore's Aman Resorts in a deal that also included two other
Montenegrin beach resorts.
Among the celebrities reportedly showing an interest in the former
communist republic are the US actor Michael Douglas, ex-Formula One
champion Michael Schumacher, the Williams tennis sisters and
businessmen like US property tycoon Donald Trump.
Another project launched since Montenegro broke away from a union
with Serbia in June 2006 following a historic independence
referendum involves Canadian businessman Peter Munck.
In October, Munck signed a deal with the government to buy a
military shipyard and develop a stretch of coastline in Tivat, which
has an airport that links the coast with European capitals.
"The arrival of Canadian millionaire Peter Munck in Tivat caused
prices to explode in this small town, where a square metre currently
sells for between 2,000 and 2,500 euros (2,700-3,300 dollars)," said
Dragan Kascelan, a local property agent.
That is part of a trend that has seen prices on Montenegro's
200-kilometre (125-mile) coastline soar by up to 100 percent in a
year, according to property agents.
Although some local experts predict stagnation, a report this month
by global real estate agents Colliers International said the growth
"shows no sign of slowing down."
"Montenegro's coastline has become one of the most potent property
investment markets in the world, as our research shows," said Jovan
Jovanovic from the Serbian branch of Colliers.
"Revenue from the sale of real estate in Montenegro has increased by
400 percent in just two years, according to official figures," said
Jovanovic.
While the property boom has only made a slight impact on the
Montenegrin economy, which posted growth of 4.5 percent in 2006, it
is far more noticeable on the winding roads linking the capital
Podgorica with the coast.
Lorries loaded with bricks and other materials clog the route, along
which an increasing number of warehouses have sprung up to provide a
steady supply for new constructions.
For the Hodgsons, there are no concerns however that the building
boom might spiral out of control and harm the ambience of their new
hometown.
"We don't want to see concrete buildings all the way around. Unlike
in Budva, this area has a great harmony," said Michael. "We don't
think that the bay will get overdeveloped."
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Are you ready for the full Montenegro?, Telegraph.co.uk, United
Kingdom - 22 Jun 2007
The world's newest independent state is also one of its most
beautiful, says Graham Norwood
A helicopter flies past, carrying developers seeking sites for new
coastal homes. Below them, a coach disgorges the latest posse of
buyers from Britain, Ireland and Russia. Meanwhile the pearly-blue
waters of the Adriatic lap gently on beaches below the lush green
hills of Europe's newest property target: Montenegro.
This tiny country - bordered by Croatia as well as Bosnia, Serbia,
Kosovo and Albania - is not only the world's newest independent
state, but one of its most beautiful.
Drive the slow coastal route from the Croatian walled town of
Dubrovnik and your first impressions, once across the Montenegrin
border, are of a poor nation with more than its fair share of
ex-communist brutalist architecture. Drive on and you soon see why
this country is the focus of frenzied buying by property investors
and holiday-home purchasers.
Unspoilt coastal villages and towns such as Perast and Kotor line a
fjord on the south-west coastline. Their stone houses, badly in need
of costly renovation, sold for around £30,000 in 2004 but now fetch
four times that amount.
Go further south to tourist havens like Budva and Sveti Stefan - a
celebrity hangout for Sophia Loren and Richard Burton in the Fifties
and Sixties - and you witness jaw-dropping coastal views that match
the Cote d'Azur or the Italian Lakes.
"Prices in parts of Montenegro have risen 100 per cent in two
years," says Jonty Crossick of Ready2Invest, a consultancy buying
land and developing homes in 10 countries, many in eastern Europe.
"When Montenegro was united with Serbia it was treated as the poor
relation in the partnership.
"There was little industry, no intensive farming, not even enough
hotels to meet tourist demand. It's now unspoilt and naturally
beautiful." As if to prove the point, he and his business partner
and wife, Alise, are creating a 'boutique village' in the coastal
area of Androvici, where there will be 22 luxury villas, each with
large private gardens, an infinity pool and uninterrupted sea views.
At prices from £600,000 to £2 million each, they are proof that
Montenegro has moved on from communism.
"Montenegro used to be the cheap place where Serbs came for two
weeks' holiday," says Alise Crossick. "They would bring 14 chickens
with them and kill one for each night's dinner."
Now a growing number of beachside cafés and surf shops vie for
attention with new hotels. Since formally separating from Serbia in
2006 there has been a flood of commercial interest. Property prices
have boomed.
Louise Povah, a 32-year-old businesswoman from East Sussex, has
invested heavily in Montenegro with her Serbian boyfriend Aleks
Radonjic. "Our apartment in Budva is 100 square metres and has two
bedrooms, two bathrooms, and sea views," she says. "We bought in
2000 for €500 (about £340) per square metre. Prices are now at
€1,500 psm." She also owns a local juice bar and has bought a house
in the ski resort of Zabljik, near a Montenegrin national park, and
a piece of coastal land.
She says would-be buyers must ensure that an independent solicitor
checks legal ownership - many older homes are owned by generations
of families with contending claims on land - while some newer homes
are not always logged with the country's Land Registry. Buyers
should always check developers' credentials, she says.
Dragan Prelevic is a lawyer working with developers and individual
buyers from overseas, and is acting for Roman Abramovic as the
Chelsea football club boss negotiates the purchase of an eight-mile
stretch of Montenegrin coastline. "One weakness is infrastructure,"
he says.
"There are a few flights directly into Montenegro's Tivat airport,
but otherwise you must go to the Croatian capital Dubrovnic and
drive 90 minutes before crossing the border and facing narrow,
ill-repaired roads. Water shortages have hit the country in recent
summers and there's the problem of planning control if we want to
avoid overdevelopment."
Montenegro is at a crossroads, he feels. It can keep its beauty and
complement it with restricted growth, or it can let development rip,
Spanish-style, along the lines of what Prelevic calls "the Costa del
Concrete".
Hectic development brings property sharks to bask in the area, too.
There are reports of agents and builders promising more than they
deliver, claiming to have planning permission where none exists, and
not providing paperwork to foreign buyers, who are vulnerable
because of the Serbo-Croat language.
It is also hard for foreign buyers to arrange mortgages in
Montenegro, although some developers and estate agents offer
in-house finance packages. "Just be careful - all former east
European countries now have western-style foreign exchange protocols
except Montenegro," says James Hickman of exchange firm Caxton FX.
"It's still much more bureaucratic."
Nonetheless there are bargains to be had, especially while
Montenegro attempts to improve its infrastructure to at least the
level of neighbouring Croatia. "There's a 10-year programme to
create motorways and a new road network," says Dragan Prelevic. "Two
airports are being built and the water system updated."
Canny investors need to act quickly. Montenegro certainly isn't
hanging about.
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Budva tourist office reports a boom in the number of visitors,
Ready2invest, UK - 13 Jun 2007
Prospective property investors in Montenegro could be heartened by
the news that the popular resort of Budva is attracting ever-growing
numbers of tourists, according to official statistics.
The Budva tourist office reported that there are approximately
11,800 guests staying in the city - representing a 13% rise on
figures for the same period in 2006.
Visit-Montenegro.com said that some 8,569 tourists stayed in hotels,
with around 3,200 staying in private accommodation, including rented
holiday homes - some 1,600 more than was estimated for last year.
Furthermore, for the first 4 months of 2007, 29,089 tourists visited
the Budva Riviera, meaning an 87% increase on the figure for 2006.
Recently, the Federation of Overseas Property Developers, Agents and
Consultants said there has been "quite a movement" towards
Montenegro as a property investment destination in recent years.
"Properties are cheap, now that they have got away from Serbia it's
safe, and it's beautiful. I think it would be a good proposition,"
remarked spokesperson Arlette Adler.
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Montenegro’s Coastal Real Estate Prices Increasing by Up to
50%,Newswire Today (press release), UK - 11 Jun 2007
Real estate prices on Montenegro’s coast are rising by up to 50% per
annum in some areas, according to new research from Colliers
International Serbia.
The price of new modern buildings in the popular towns of Herceg
Novi, Ulcinj, Bar and Tivat is now between 2500-5000 EUR per square
meter while in Budva, Sveti Stefan and Petrovac prices are ever
higher, according to Colliers International Serbia. The increase in
both prices and demand shows no sign of slowing down.
The price of land is also increasing constantly, and it now ranges
between 200 EUR and 450 EUR per square meter, depending on the area,
with the most expensive being the Sveti Stefan, Budva and
Petrovac-Lucice area.
Montenegro’s GDP growth in 2006 was 4.5%, while inflation was low at
2.8% and foreign direct investment (FDI) increased by 31% in 2006 to
over 500 million EUR.
Jovan Jovanovic, Manager of Colliers International Serbia’s
Investment and Corporate Advisory Services that produced the
research commented, “Montenegro’s coastline has become one of the
most potent property investment markets in the world, as our
research shows. Revenue from the sale of real estate in Montenegro
has increased by 400% in just two years, according to official
figures.”
Jovica Jakovac, General Manager of Colliers International Serbia,
added “Colliers is very active in Montenegro, we are able to offer
clients a comprehensive range of real estate services there,
including representation and valuation. It’s just another reason why
we are the clear market leaders in our field in the region.”
Colliers International Southeast Europe was recently named Property
Consultant of the Year for the region for the second straight year.
"