Foreigners invested 1,5 billion euros in real estate in Montenegro

Foreigners invested 1,5 million euros in real estate in Montenegro

Over the past four years, foreigners have acquired real estate in Montenegro for 1,5 billion euros. According to the Central Bank of Montenegro, interest in the local market remains high, but is gradually declining. In 2021, foreigners bought real estate for 278 million euros, in 2022 - for 448 million, 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.

Basic data:

  • In 2021, buyers spent 278 million euros.
  • In 2022, interest increased by 60% to €448 million.
  • In 2023, the amount was 463 million euros.
  • In 2024, in 11 months, foreigners purchased real estate worth 398 million euros.

Sale of real estate by foreigners in Montenegro, it also remains a hot topic. Over the past four years, they have sold property worth 421 million euros. In 2021, this figure was 72 million euros, in 2022 - 108 million euros, in 2023 - 134 million euros, and in the first 11 months of 2024 - 107 million euros.

Foreigners purchased two-thirds of real estate

In the first 11 months of 2024, banks in Montenegro issued housing loans worth 156 million euros, and despite loans from local citizens and companies, foreigners accounted for about two-thirds of real estate buyers in the country. This confirms the high interest of foreign investors, especially in the context of rising housing prices.

Property Prices: Revaluation and Expectations

Montenegro's Finance Ministry stated in its Economic Reform Program that real estate in the country is overvalued due to increased foreign investment. A slow decline in housing prices to their fair value is expected in the coming years. The average price per square meter in new buildings in the third quarter of 2024 was 1853 euros, significantly higher than 1192 euros per square meter in 2020.

Dynamics of foreign investment

FDI inflows into Montenegro's real estate sector have amounted to around 2021% of the country's GDP annually since 6,4, much higher than the 3,5% recorded between 2015 and 2020. This increase is due to increased foreign interest in real estate rather than an increase in objective costs.

Citizens of Serbia, Russia and Germany are the leaders in purchasing

Over the past four years, the largest sums in Montenegrin real estate have been invested by citizens and companies from Serbia — 230 million euros. In second place are Russians with 210 million euros. In recent years, interest from Russian and German investors has noticeably decreased. In contrast, Turkish citizens have shown growing interest, increasing their investments from 14,7 million euros in 2021 to 56,2 million euros in 11 months of 2024.

Trends of foreign investment in Montenegro:

  1. Decreasing interest from Russians and Germans.
  2. Growing interest from buyers from Turkey and other countries.
  3. Serbia remains the largest investor in Montenegro's real estate.
  4. Minimal impact of objective costs on the growth of real estate prices.

Changes in the real estate market and the growing importance of service quality

Given the expected changes in the Montenegrin real estate market, investors and buyers are likely to be more attentive to the quality of services provided. With prices slowing down and interest from some foreign citizens slowly waning, the key factor in making a purchase decision will be not only the price, but also the level of service.

The demand for professional advice, quality assistance in selecting real estate, as well as support in legal and financial matters will increase. This means that companies offering comprehensive services in selecting real estate and working with businesses will be able to stand out from the competition, providing clients with additional guarantees and confidence in their decisions.

In the coming years, buyers will pay more attention to factors such as the reliability of agencies, transparency of transactions, the ability to obtain information on the legal status of real estate and conditions for obtaining mortgage loans. Therefore, the development of professional and high-quality services aimed at helping with investments and the acquisition of real estate will become an important competitive advantage for players in the Montenegrin real estate market. It is important to understand that in the new economic conditions it will be much more significant not just “buy” an object, but do it correctly and with minimal risks, — shared his comment Vyacheslav Mayevsky, founder of the real estate agency MD Realty.

Conclusion:

Montenegro has attracted significant investment in the real estate market over the past few years, which has influenced the growth of prices. Despite the slowdown in the growth of interest from foreign investors, the market continues to be attractive for purchases. In the coming years, a gradual decline in real estate prices is expected, which opens up additional opportunities for investors.

Source.
Image: pexel.com