Authored by the expert who managed and guided the team behind the Montenegro Property Pack
Everything you need to know before buying real estate is included in our Montenegro Property Pack
Are you considering investing in Montenegro's real estate market? Curious about what the future holds for property values in this picturesque Balkan country? Want to know the key trends that could impact your buying decision in 2025?
We will lay down recent insights, providing you with a clear picture of the market's trajectory. Here, no guesswork, we rely only on solid data to guide your investment choices.
Actually, we know this market inside and out. We keep tabs on it regularly, and all our discoveries are reflected in the most recent version of the Montenegro Property Pack
1) Coastal rental yields will rise as short-term rentals gain popularity with tourists
Montenegro's tourism boom is making short-term rentals a hot commodity.
In Kotor, for instance, the number of Airbnb listings has climbed to 274 by September 2024, reflecting a surge in demand. This picturesque coastal town is a magnet for tourists, and platforms like Airbnb and Booking.com are thriving here. Properties in Kotor are booked for an impressive 234 nights a year, with an average daily rate of $94, underscoring the lucrative market for short-term rentals.
The Montenegrin government is actively promoting tourism, which means more flights and travel routes are opening up. This has led to a growing preference for short-term rentals over traditional hotels. Tourists are increasingly opting for entire homes and studios, which are readily available on these platforms.
Coastal rental properties are seeing higher occupancy rates, with Kotor averaging 64%. This is a significant jump from previous years, driven by media coverage that has put Montenegro on the map as a trending tourist destination. As a result, property prices in these coastal areas are on the rise.
Investors are taking note of these trends, recognizing the potential for strong rental yields in Montenegro's coastal regions. The combination of high occupancy rates and competitive daily rates makes these properties an attractive investment opportunity.
Sources: Global Property Guide, Airbtics, Sol and World
2) Foreign buyers will target Montenegro's coastal properties more due to favorable tax incentives
Foreign buyers are eyeing Montenegro's coastal properties due to favorable tax incentives.
In 2023, Montenegro introduced a flat 15% capital gains tax and property transfer tax incentives, making it a hotspot for foreign investors. These tax breaks are a game-changer, allowing investors to maximize returns while keeping taxes low. Compared to other European coastal areas, where taxes can be steep, Montenegro's approach is a breath of fresh air.
Montenegro's property prices are another draw. They're competitive, making it a smart choice for those looking to invest in real estate. The combination of affordable prices and tax benefits makes Montenegro a standout option for savvy investors.
The tourism industry in Montenegro is booming, adding another layer of appeal. In August 2023, there was a 6.3% increase in international visitors, boosting the demand for rental properties. This surge in tourism means investors can charge premium rates during peak seasons, enhancing the rental potential of their properties.
For those considering an investment, the strong rental market is a significant factor. With the influx of tourists, rental properties are in high demand, offering a lucrative opportunity for foreign buyers.
Sources: Global Property Guide, Objekta Real Estate, Visa to Travel
Everything you need to know is included in our Property Pack for Montenegro
3) Montenegro will draw more foreign investors by enhancing infrastructure and connectivity
Montenegro is rapidly enhancing its infrastructure, making it a hotspot for foreign investors.
In recent years, the government has been pouring resources into projects like highways and digital networks, with a big helping hand from international partners such as China. These improvements are set to boost the country's connectivity, making it even more attractive to investors. Foreign Direct Investment (FDI) in Montenegro jumped by 154.9 million USD in September 2024, a clear sign of its growing appeal.
This steady rise in FDI over the past few quarters shows that Montenegro is becoming a prime spot for investment. The country is not just focusing on physical infrastructure; it's also making strides in digital connectivity. With support from the European Union through the Western Balkans Investment Framework, Montenegro is enhancing its digital infrastructure, which is crucial for modern businesses.
The successful completion of the first phase of the EU-funded study on digital infrastructure highlights Montenegro's dedication to improving its investment climate. This initiative is a game-changer, as better digital infrastructure can significantly boost investor confidence. Montenegro's commitment to these developments is evident, and it's paying off.
As Montenegro continues to improve its infrastructure and connectivity, it's becoming a more attractive destination for foreign investors. The country's strategic location and ongoing development efforts are key factors in this trend. Investors are taking notice, and the numbers speak for themselves.
Sources: CEIC Data, WBIF, The Wandering Investor
4) Kotor's rental prices will steadily rise as its UNESCO status attracts more visitors
The rental market in Kotor is on the rise, thanks to its UNESCO World Heritage status.
This prestigious designation has made Kotor a magnet for tourists, with 98.99% of visitors coming from abroad, especially from the United States. As more tourists flood in, the demand for rental properties naturally goes up, pushing prices higher.
In places like Kotor, UNESCO sites often see rental prices climb due to the tourism boom. Take the Old Town, for instance, where rental income has already jumped. Imagine owning an apartment there; a property worth around €150,000 can bring in €700 a month with an 85% occupancy rate. This trend is set to continue as more tourists discover the charm of Kotor.
The short-term rental scene in Kotor is buzzing, with a median occupancy rate of 64% and an average daily rate of $94. As of September 2024, there were 274 active Airbnb listings, with typical properties booked for 234 nights a year. This high demand is a clear sign that rental prices are likely to keep climbing.
Sources: Airbtics, The Wandering Investor
5) Northern Montenegro real estate prices will stay stable due to less tourism impact than coastal areas
In Montenegro, real estate prices in the northern regions have stayed stable over 2023 and 2024.
While the north saw a modest increase of 39.9% to €1,280 per square meter, coastal hotspots like Budva, Kotor, and Tivat experienced a 49.1% rise to €2,107 per square meter. This difference shows how the north is less swayed by the tourism-driven demand that spikes prices along the coast.
Fewer tourists venture to the northern regions, which helps keep real estate prices steady. Coastal areas are tourist magnets, driving up demand and prices, while the north enjoys a more stable market thanks to its lower tourist numbers. Local demand is the main force behind real estate in the north, with surveys showing that local residents are the primary buyers.
The north also has a smaller expatriate community compared to the coast. This means local demand for real estate is more stable and less influenced by tourism. Reports suggest the northern economy is branching out from tourism, which helps keep real estate prices steady by reducing reliance on this sector for growth.
Sources: Global Property Guide, Wikipedia, SDG Montenegro
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6) Foreign retirees will buy homes in Montenegro for its low cost of living and beautiful landscapes
Montenegro is becoming a hotspot for foreign retirees looking to buy homes, thanks to its affordable cost of living and breathtaking landscapes.
In recent years, the country has seen a surge in real estate sales to foreigners, with transactions hitting 440 million euros by the end of 2022. This boom is largely fueled by buyers from Germany, Russia, Serbia, and the United States. Many retirees are drawn to Montenegro because it offers a lower cost of living compared to Western Europe. While coastal spots like Budva and Kotor can be pricier, the inland and rural areas provide more budget-friendly options, allowing retirees to live comfortably without overspending.
Montenegro's natural beauty is another big draw. Known for its dramatic mountains and rugged coastline, the country offers a peaceful and picturesque setting for retirees. The Mediterranean climate, with its warm weather throughout the year, makes it even more appealing as a retirement destination.
For those considering a move, it's worth noting that Montenegro's real estate market is still developing, which means there are opportunities for investment and growth. The government is also making efforts to attract foreign buyers by simplifying property purchase processes and offering residency incentives.
Insider tip: If you're looking for a quieter lifestyle, consider exploring the northern regions, where you can find hidden gems away from the tourist crowds. These areas not only offer tranquility but also a chance to immerse yourself in local culture and traditions.
With its combination of affordability, stunning scenery, and a welcoming atmosphere, Montenegro is poised to see a rise in foreign retirees purchasing homes. It's a place where you can enjoy a high quality of life without the high price tag.
Sources: Real Estate Magazine, OCNJ Daily
7) Multi-generational living will boost demand for larger homes with flexible spaces
Multi-generational living is becoming more popular, and it's changing what people want in a home.
In Montenegro, the 2023 census shows a lot of households, hinting at more families choosing to live together. This is part of a bigger trend where families worldwide are opting for shared living spaces. It's not just about having more room; it's about homes that can adapt to everyone's needs.
Take the U.S., for example. Over the last fifty years, the number of multi-generational households has more than doubled. This isn't just about needing more space; it's about creating homes that work for everyone, from grandparents to grandkids.
Demographics are a big part of this shift. In Montenegro, an aging population and younger folks staying with their parents longer are pushing this trend. Older adults prefer not to live alone, and younger adults are sticking around due to money and social reasons.
Globally, this pattern is clear. Economic and social factors are encouraging younger adults to stay with family, and older generations are more likely to live with relatives. This means homes need to be flexible and spacious.
Sources: Montenegro Census 2023, Pew Research, CBC Worldwide
8) Wellness-focused living will boost demand for properties with gyms and spas
People are now more interested in wellness-focused living when choosing their homes.
This shift is partly because of the booming wellness tourism industry, which is expected to hit $1.1 trillion by 2025. The idea is simple: people want their homes to be places where they can focus on health and well-being, just like when they travel for wellness retreats. The Global Wellness Institute has highlighted this trend, showing how health and well-being are becoming top priorities for many.
The wellness real estate market is also on the rise, with an annual growth rate of 15.8% from 2023 to 2028. This means more people are looking for homes that support a healthy lifestyle. Think of properties with gyms, spas, and other amenities that make it easier to live well every day. It's not just about having a roof over your head; it's about creating a space that enhances your life.
In Montenegro, luxury real estate projects are popping up with these wellness features. These developments are designed to attract wealthy individuals and investors who want more than just a beautiful home—they want a lifestyle. The media has been buzzing about these trends, making wellness living a hot topic and a desirable choice for many.
Imagine living in a place where you can start your day with a yoga session in a state-of-the-art gym or unwind in a spa after a long day. This is the kind of lifestyle that wellness-focused properties offer, and it's becoming increasingly popular. People are willing to invest in homes that provide these benefits, seeing them as essential to a high-quality life.
As more people prioritize their health, the demand for properties with wellness amenities will continue to grow. This trend is not just a passing fad; it's a shift in how we view our living spaces and what we value in a home. The desire for wellness-focused living is driving interest in properties with amenities like gyms and spas.
Sources: Beauty Matter, Global Wellness Institute, Porto Montenegro
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9) Tivat's growing luxury reputation will boost property demand
Tivat is quickly becoming a hotspot for luxury living, with property prices rising by 12% annually.
This surge is largely due to the demand for luxury waterfront developments and Montenegro's appealing tax benefits. The town's low-tax regime and the citizenship-by-investment program are attracting foreign buyers who are keen on both lifestyle and financial perks.
Investments in Tivat are booming, with new projects like luxury condos and eco-friendly villas popping up to meet the demand. These developments are designed to offer a blend of comfort and sustainability, appealing to those looking for a high-end lifestyle.
Porto Montenegro is a major draw, featuring a top-notch marina, luxury residential areas, and high-end shopping. It's a vibrant hub that caters to superyachts and offers excellent rental yields, making it a solid investment choice.
The expansion of Tivat Airport is another factor boosting interest. With new routes like the Birmingham-Tivat flight by Jet2, connectivity is improving, making it easier for international visitors and investors to reach this coastal gem.
As Tivat continues to grow as a luxury destination, its property market is set to thrive, offering both lifestyle and investment opportunities. The town's reputation is on the rise, drawing more attention from those seeking a slice of luxury living.
Sources: Destinations by LeadingRE, Montenegro Business, Destinations by LeadingRE
10) Virtual reality tours will be standard in listings making it easy for foreign buyers to explore remotely
Virtual reality tours are now a staple in property listings, especially for those buying from abroad.
With the rise of virtual reality technology in real estate, more people are exploring homes without leaving their couches. Back in 2023, over half of adults had already experienced a virtual tour, and a whopping 67% of home buyers wanted virtual tours when checking out listings. This tech-savvy approach is reshaping how we buy homes.
Listings with virtual tours are a hit, getting 87% more views than those without. Buyers are spending more time on these sites, thanks to the convenience of remote viewing. This trend really took off during the COVID-19 pandemic, when virtual tours became a necessity, cutting down on the need for endless physical visits and saving time for both agents and international clients.
In Montenegro, the surge in foreign property investments underscores the value of virtual tours. By the end of 2022, foreign direct investment in Montenegro's real estate hit 12.9 billion euros, with a big chunk going into real estate. This momentum carried into 2023, with investments growing by 3.3%.
For those eyeing properties in Montenegro, virtual tours are a game-changer. They offer a sneak peek into potential homes, making it easier for international buyers to make informed decisions without hopping on a plane. This tech is not just a trend; it's becoming the norm in the real estate world.
Sources: ADS Marketing, PhotoUp, MFI Council
11) Environmental efforts will boost property values along Montenegro's coastline
Montenegro's coastline preservation efforts are boosting property values.
In recent years, especially around 2023 and 2024, the government has ramped up funding for coastal preservation. This isn't just local money; it's backed by the Global Environment Facility Trust Fund and the United Nations Environment Programme. Their support underscores a serious commitment to keeping Montenegro's coastlines pristine.
Take the Budva Riviera, for example. Here, environmental projects have paid off, and property values have climbed. Luxury homes in these areas are fetching top dollar, showing how a clean, beautiful environment can add real estate value. This isn't just a Montenegro thing; worldwide, properties in protected areas often see a price bump because they offer a better quality of life.
Tourism in Montenegro is booming, thanks to its stunning landscapes and green initiatives. This surge in visitors is not only boosting the economy but also making properties in these areas more attractive. Media coverage of Montenegro's eco-friendly efforts is catching the eye of potential buyers, adding to the allure.
With more tourists flocking to Montenegro, the demand for property is on the rise. People are drawn to the idea of owning a piece of this beautiful, well-preserved land. Environmental initiatives are making these properties even more desirable, as they promise a sustainable and picturesque living environment.
As Montenegro continues to invest in its natural beauty, the real estate market is likely to see further growth. Buyers are increasingly interested in properties that offer both luxury and a commitment to environmental sustainability. This trend is expected to continue, making Montenegro a hot spot for eco-conscious investors.
Sources: UNEP, Global Property Guide, European Commission
This article gives you valuable insights, but remember, it’s not and will never be investment advice. We pull data from a range of sources to provide you with the most accurate picture possible, yet we can’t guarantee complete accuracy. Markets are difficult to predict. Make sure to do your own research and consult a professional before making any financial moves. Any risks or losses are your own responsibility.