Buying real estate in Montenegro?

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Is 2025 a good time to buy real estate in Montenegro?

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Authored by the expert who managed and guided the team behind the Montenegro Property Pack

buying property foreigner Montenegro

Everything you need to know before buying real estate is included in our Montenegro Property Pack

Montenegro's property market has captured international attention with coastal prices rising nearly 50% between 2023 and 2024, making investors wonder if the opportunities remain golden.

As we enter mid-2025, the market shows signs of maturing from its explosive growth phase into a more sustainable trajectory. Coastal hotspots like Budva and Kotor continue to attract premium prices, while inland cities offer more accessible entry points for savvy investors.

If you want to go deeper, you can check our pack of documents related to the real estate market in Montenegro, based on reliable facts and data, not opinions or rumors.

This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.

How this content was created 🔎📝

At Investropa, we explore the Montenegro real estate market every day. Our team doesn't just analyze data from a distance—we're actively engaging with local realtors, investors, and property managers in cities like Podgorica, Budva, and Kotor. This hands-on approach allows us to gain a deep understanding of the market from the inside out.

These observations are originally based on what we've learned through these conversations and our observations. But it was not enough. To back them up, we also needed to rely on trusted resources

We prioritize accuracy and authority. Trends lacking solid data or expert validation were excluded.

Trustworthiness is central to our work. Every source and citation is clearly listed, ensuring transparency. A writing AI-powered tool was used solely to refine readability and engagement.

To make the information accessible, our team designed custom infographics that clarify key points. We hope you will like them! All illustrations and media were created in-house and added manually.

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Fact-checked and reviewed by our local expert

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Inna Kataeva 🇲🇪

Investment Consultant

Inna Kataeva specializes in real estate investment across Montenegro. She provides tailored support, from selecting apartments, land, or commercial properties to advising on location benefits like climate, infrastructure, and development plans. With a focus on transparency, Inna ensures seamless transactions by collaborating with trusted agencies, developers, and legal professionals. Whether seeking a coastal retreat or an investment opportunity, she is committed to guiding you through every step with expertise and care.

Are property prices in Montenegro's coastal areas still rising in June 2025?

Yes, coastal property prices continue their upward trajectory, though at a more measured pace than the explosive 50% growth seen in 2023-2024.

Current prices in prime coastal locations like Budva, Kotor, and Tivat range from €2,000 to €4,000 per square meter for standard properties, with luxury waterfront apartments exceeding €5,000 per square meter. The annual growth rate has moderated to 3-7% in 2025, indicating a maturing market rather than a cooling one.

Q1 2025 data shows coastal properties averaging €2,328 per square meter, with the most expensive areas in Sveti Stefan commanding €3,000-€6,000 per square meter. This price stabilization suggests the market has absorbed the rapid appreciation phase and is now entering a period of sustainable growth.

The northern coastal regions have seen particularly strong performance, with a 39.9% surge to €1,280 per square meter in some areas. Regional variations remain significant, with Herceg Novi offering more affordable options while maintaining good rental potential.

Market analysts expect this steady growth pattern to continue through 2025, supported by strong tourism numbers and limited coastal land supply.

What are the current mortgage options for foreign property buyers in Montenegro?

Foreign buyers can access mortgage financing in Montenegro, though terms differ from those available to residents.

Current mortgage rates for foreigners range from 6-8% per annum, compared to 5-6% for local buyers. Banks typically require a down payment of 30-50% of the property value, with loan terms extending up to 15-20 years.

Requirement Details for Foreign Buyers
Interest Rate 6-8% per annum
Down Payment 30-50% of property value
Loan Term Up to 15-20 years
Income Proof International or local sources accepted
Credit History From home country required
Bank Account Montenegro account often preferred

Most major banks in Montenegro offer mortgages to foreigners, though some prefer applicants with Montenegrin residency permits. The application process requires more documentation than for locals but remains straightforward.

Starting October 2025, banking integration with the EU will make transfers between Montenegro and EU countries seamless, potentially improving financing conditions for EU buyers.

As of today, is there more demand from buyers or supply from sellers in Montenegro's property market?

The Montenegro property market clearly favors sellers in June 2025, particularly in coastal areas where demand significantly outweighs supply.

Prime locations like Budva, Kotor, and Tivat experience intense competition among buyers, with multiple offers common for quality properties. The coastal market has seen a 20% increase in sales volume since 2023, driven by tourism recovery and international investor interest.

Key buyer nationalities include Serbia, Turkey, USA, Germany, Cyprus, Russia, and UAE, though Russian buyer activity has decreased due to geopolitical tensions and sanctions. This shift has been partially offset by increased interest from Western European and Middle Eastern investors.

Inland markets like Podgorica show more balanced conditions, though quality new developments still attract strong interest. The overall market dynamics suggest sellers can command premium prices, especially for properties with sea views, modern amenities, or proximity to major developments like Porto Montenegro.

Real estate professionals report that well-priced coastal properties often sell within weeks of listing.

What types of properties offer the best value in Montenegro today?

The best value opportunities vary significantly based on investment goals and location preferences.

For rental income seekers, one-bedroom coastal apartments priced between €100,000-€200,000 offer the easiest entry point with strong rental demand. Properties in Kotor Old Town achieve impressive 64% occupancy rates with an average of 234 nights booked annually.

Budva beachfront studios command high summer rates, while Tivat apartments near Porto Montenegro attract year-round rentals from yacht owners and business travelers. Herceg Novi presents lower entry prices with good yields, making it attractive for budget-conscious investors.

For capital appreciation, Podgorica new developments showing 4.7% quarterly growth offer strong potential. Properties near major infrastructure projects, including the Bar-Boljare Highway and airport expansions, are positioned for above-average appreciation.

It's something we develop in our Montenegro property pack.

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What are the short-term and long-term price forecasts for properties in Montenegro?

Property price forecasts for Montenegro show continued growth at sustainable rates through 2025 and beyond.

Short-term projections (6-12 months) indicate coastal areas will maintain 3-7% annual appreciation, while Podgorica and inland markets expect 4-5% growth. The market has shifted from rapid appreciation to steady increases, with no indicators suggesting price corrections.

Luxury coastal properties are expected to outperform the broader market, particularly in established areas like Porto Montenegro and Luštica Bay. These premium developments continue attracting high-net-worth individuals seeking Mediterranean lifestyle investments.

Long-term forecasts (2-5 years) center on EU accession expected in 2026-2027, which historically triggers 20-40% appreciation in new member states. Infrastructure completions, including highway connections and airport expansions, will unlock value in currently less accessible areas.

The residential real estate market is projected to grow by 6.19% annually through 2029, resulting in a market volume of US$24.78 billion.

Are the current interest rates favorable for property financing in Montenegro?

Current interest rates present moderate challenges but remain manageable within the broader European context.

At 6-8% for foreign buyers and 5-6% for residents, Montenegro's rates reflect its emerging market status. With inflation at 3.4% in April 2025, real interest rates remain positive, providing some protection against currency devaluation.

The Central Bank's monetary policy has maintained stability, avoiding the extreme rate fluctuations seen in some neighboring countries. For comparison, these rates are higher than EU averages but competitive with other non-EU Balkan markets.

Cash buyers or those with substantial down payments hold better negotiating power in the current market. Financing costs should be carefully factored into investment calculations, particularly for properties intended for rental income.

The upcoming EU banking integration in October 2025 may lead to more competitive rates as European banks gain easier access to the Montenegro market.

Are Montenegro coastal properties regarded as safe investments today?

Montenegro coastal properties are considered relatively safe investments in June 2025, supported by multiple positive factors.

Strong rental demand generates gross yields of 4.4-7.1%, significantly outperforming many European markets. Kotor leads with exceptional performance, achieving €94 average daily rates and 234 nights annual occupancy.

Limited coastal land supply creates natural protection against oversupply, while consistent tourism growth supports rental income stability. The country welcomed nearly one million passengers through Tivat Airport in the first nine months of 2024 alone.

EU accession progress reduces political risk, with Montenegro designated as the lead candidate for membership. The established expat community provides market depth and liquidity.

However, investors should consider concentration risk in tourism-dependent areas and monitor regulatory changes regarding short-term rentals. The new 15% VAT requirement on rental income has already been implemented, providing regulatory clarity.

What transaction costs should buyers expect when purchasing property in Montenegro today?

Property transaction costs in Montenegro are moderate compared to EU standards, totaling approximately 5-6% of purchase price.

For a €300,000 property purchase, buyers should budget for transfer tax of 3% up to €150,000, then 5% on amounts above, resulting in €12,000 total tax. Notary fees range from €350-€500 plus 21% VAT, calculated at 0.01% of property value.

Cost Component Amount (€300,000 property) Notes
Transfer Tax €12,000 3% up to €150k, then 5%
Notary Fees €350-€500 + VAT 0.01% of value plus 21% VAT
Legal Fees €1,200-€2,000 Depending on complexity
Translation €200-€400 For foreign documents
Registration €100-€200 Property registry fees
Bank Fees €300-€500 If financing used
Total €14,150-€15,600 Approximately 5-5.2%

New builds include 21% VAT in the advertised price, while resale properties are VAT-exempt. Annual property tax ranges from 0.25-1% of assessed value, remaining competitive regionally.

It's something we develop in our Montenegro property pack.

infographics map property prices Montenegro

We created this infographic to give you a simple idea of how much it costs to buy property in different parts of Montenegro. As you can see, it breaks down price ranges and property types for popular cities in the country. We hope this makes it easier to explore your options and understand the market.

How do Montenegro's property investment returns compare to neighboring countries today?

Montenegro offers competitive advantages compared to regional alternatives, balancing pricing with yields and ownership ease.

Coastal properties priced at €2,000-€4,000 per square meter compete favorably with Croatia's €2,500-€5,000 range, while offering higher rental yields of 4.4-7.1% versus Croatia's 3-6%. Albania presents lower entry prices at €1,200-€2,500 but with less developed infrastructure.

Montenegro's liberal foreign ownership rules surpass EU member restrictions in Croatia and Greece. Foreigners can freely purchase apartments, houses, and urban land without restrictions, unlike the Golden Visa requirements in Greece.

The combination of EU candidate status, strong yields, and straightforward purchase procedures positions Montenegro advantageously. While Albania offers budget options and Croatia provides EU membership benefits, Montenegro balances accessibility with growth potential.

Tourism infrastructure and political stability give Montenegro an edge over Albania, while lower prices compared to established EU markets create appreciation opportunities.

What major infrastructure developments are currently affecting property values in Montenegro?

Several transformative infrastructure projects are driving property value appreciation across Montenegro in 2025.

The Bar-Boljare Highway connecting the coast to Serbia reduces travel times by 2 hours, opening new development corridors. Properties along this route have seen 10-15% annual appreciation as accessibility improves.

Tivat and Podgorica airports are expanding capacity by 40%, with Turkish Airlines adding 10 weekly flights from Istanbul starting 2025. This enhanced connectivity directly impacts coastal property demand.

Porto Montenegro's Phase III adds 250 luxury residences and expanded retail space, maintaining the area's status as a premium destination. The €500 million Komarnica Hydropower Plant creates local employment while improving energy security.

The Trans-Balkan Electricity Corridor and 5.5 GW renewable energy projects position Montenegro as a green energy hub, attracting environmentally conscious investors and potentially reducing long-term operating costs for property owners.

Is the current regulatory environment in Montenegro favorable for foreign property investors?

Montenegro maintains one of Europe's most favorable regulatory environments for foreign property investors in 2025.

Foreigners can freely purchase apartments, houses, and urban land without restrictions. The only limitations apply to agricultural and forest land, which can still be acquired through a Montenegrin company or if under 5,000 m² with a residential building.

Recent regulatory improvements have enhanced market security. Mandatory use of licensed real estate agencies increases transaction safety, while standardized contracts reduce legal risks. The new rental permit system provides a clear framework for short-term lettings.

Tax treatment remains competitive with 15% flat capital gains tax and no wealth tax or inheritance restrictions for foreigners. Income tax on rental income is set at 9%, though the new 15% VAT requirement on rental income adds to operational costs.

The government actively encourages foreign investment as part of its EU accession strategy, maintaining stable and transparent property rights.

What impact will Montenegro's expected EU membership have on current property investments?

Montenegro's anticipated EU membership in 2026-2027 represents a significant catalyst for current property investments.

Historical precedents from Croatia, Poland, and other accession countries show property price increases of 20-40% in the years surrounding membership. Current buyers are positioned to benefit from pre-accession pricing while gaining exposure to post-membership appreciation.

EU membership will bring free movement rights for 450 million EU residents, dramatically expanding the potential buyer and renter pool. Infrastructure funding through EU structural funds will accelerate development projects and improve connectivity.

Banking integration will ease mortgage access from EU banks, potentially reducing financing costs and increasing market liquidity. Legal harmonization will strengthen property rights protection and standardize transaction procedures.

It's something we develop in our Montenegro property pack.

Conclusion

This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.

Sources

  1. Global Property Guide - Montenegro Property Market Analysis
  2. MONSTAT - Prices of Dwellings Q1 2025
  3. Investropa - Montenegro Real Estate Market Report
  4. CEE Legal Matters - Real Estate Montenegro 2025
  5. European Parliament - Montenegro EU Accession
  6. Mercury Estate - Montenegro Regulation Changes
  7. International Investment - Montenegro Real Estate 2025
  8. Montenegro Prospects - Cost of Buying Property
  9. Centrarium - Montenegro Real Estate Market 2025
  10. EBRD - Montenegro Country Assessment 2024-25
  11. Statista - Montenegro Real Estate Market Forecast