A Guide to Montenegro Property Investment

The tiny country of Montenegro is making quite a splash on the international property investment scene.  As this formerly strife-riddled land breaks out on its own, governments, investors, holidaymakers and would be expatriates are all standing up to take notice.  With its incredible Adriatic coastlines and pristine alpine mountains, Montenegro has a lot to offer holidaymakers, expatriates and investors.

Its growing real estate market, bustling tourism industry and progressive, forward-moving government combine to make Montenegro a rising star.  We at Nubricks.com would cite the following 10 factors as some of the strongest driving confidence in Montenegro property investment at the current time: -

1) The Fledgling Republic is Showing Real Signs of Strength and this is Bolstering Property Investor Confidence in Montenegro

Montenegro has had more than its fair share of strife throughout its history.  Its new republic form of government however, is making great strides in forging a more promising future for the nation and its people.  Along the way, it has managed to capture the attention of the international community and the hearts of holidaymakers and investors.  The October 2007 adoption of a Constitution lent a great deal of credibility to the new government and has helped to further bolster investor confidence.  Whilst it is far from being an “established” government, Montenegro is inspiring confidence not only with investors, but other governments and political organisations around the world as well.

2) Montenegro’s Use of the Euro Makes Real Estate Investors Feel More Comfortable

Investors who do not appreciate having to deal with awkward exchange rates find Montenegro’s use of the euro very appealing.  Whilst Brits will still have to exchange their cash, most other Europeans do not have to.  The common currency makes Montenegro investment more attractive and lends a sense of stability to the country and its economic system as well.

3) Montenegro’s Efforts to Gain Respect and Recognition are Increasing Overall Investor Confidence in this New Country

Montenegro is a fledgling country, but it is proving its earnest desire to join the international community.  The country has already joined the United Nations, the Council of Europe, the International Monetary Fund and the Stability Pact.  It is presently seeking entry into the World Trade Organisation and other more regional groups.  Whilst it is still up and coming, Montenegro’s great strides in recent history are adding to investor confidence in the region.  The country is also expected to seek European Union entry in the coming years.

4) Incredible Property Prices Make Montenegro Look Very Attractive to Real Estate Buyers

The low entry prices for buying property in Montenegro are very attractive to investors and expatriates looking to relocate.  It is possible to purchase land for under EUR 40,000 for example.  Some apartments in the Bay of Kotor area are still considered real steals considering their location, coming in at less than EUR 50,000.  Off-plan properties in resort areas are also quite attractive for investors.  Prices start around GBP 100,000.  Whilst the low entry prices are in place today, all indicators show demand for Montenegro property will continue to rise and prices along with it.  If the country’s quest for EU entry is successful, those who buy in early will likely reap the biggest rewards.

5) Booming Tourism Industry Shores Up Property Investor Confidence in Montenegro

As the spotlight shines bright on Montenegro, holidaymakers are putting this country high on their destination list.  This is incredibly good news for investors looking at buy-to-let and even holiday home potential.  The ability to resell is also quite high here as well.  The boom in tourism is expected to continue for some time.  The World Travel & Tourism Council anticipates a 15.2% increase in demand for 2007 alone, with a 10.7% per annum increase through to 2017 - which is massively in excess of the global average and proves just how positively the prospects in Montenegro are improving. Holidaymakers here are finding the country’s beaches, mountains and incredible Roman ruins and other historic sights are well worth the effort of visiting.

6) The Geography and Climate Make Montenegro Interesting to Holidaymakers and Real Estate Investors

With less than 14,000 sq km of land mass and under a million residents, Montenegro is far from being Europe’s largest or most populated country! Still, this former communist nation has much for holidaymakers, expatriates and investors to explore.  The country itself is bordered by Bosnia, Serbia, Albania, Croatia and the Adriatic Sea.  It is the latter that tends to make it very appealing to holidaymakers.  Montenegro boasts more than 52km of beaches along the Adriatic.  The country’s landscape includes lowlands, beaches, river valleys, forests and high mountains.  Its climate ranges from Mediterranean in the southwest to more of a continental feel in the northern mountainous regions.  This diversity is very appealing to holidaymakers and investors alike.

7) Growing Economy Makes Montenegro a Ripe Location for Property Investors

Montenegro still has a long way to go to be considered a country with a “booming” or “bustling” economy, but it is making impressive strides.  The country’s GDP is EUR 1.6 billion and growing at a rate of about 4.3%, which is well above the western European norm.  Whilst it does have high poverty and unemployment rates, as more development and tourism come to the country it is believed this will change.  The country’s economy is driven by steel and aluminium manufacturing, tourism and agricultural products and is expected to keep expanding for at least the medium term.  As Montenegro continues to compete for worldwide recognition and EU entry, the economic situation here is expected to continue to improve.  This is very good news for investors who want to get in on the ground floor of a country that is seen by many as a diamond in the rough.

8) Booming International Efforts are Combining to Improve Montenegro’s Infrastructure, Making Investors Here More Confident

As Montenegro benefits from the amount of international attention it has received as of late, its infrastructure is also gaining some advantages.  The European Bank of Reconstruction and Development and the World Bank have kicked in to help the tiny country improve its roads and railways.  They are also helping fund improvements to the water systems, airports and local banks.  All of this is being done to help attract foreign capital and it is working.  As the infrastructure improves, Montenegro is becoming even more attractive to holidaymakers and investors.

9) International Attention to Transform Montenegro is Appealing to Property Buyers

The spotlight is on Montenegro in a very big way right now.  Government organizations and entities such as the EU are working to help the country bolster its economy and infrastructure.  As they do this, foreign investors are spending a fair amount of money in the country, as well.  Canadian investor Peter Munk for example, is spending millions creating a yachting hotspot on the Bay of Kotor.  With dozens of other resorts under development, Fortune magazine has asked if Montenegro is the next Monaco!

10) Buying Process Simplicity and Taxes are Favourable for Investors and Help Boost Overall Confidence and Commitment

Buying property in Montenegro has become much easier as of late.  While it is recommended that council be sought to help guide the process, many investors find the system rather easy to understand.  Purchase taxes are generally fairly small, and include about 1% of the property price in legal fees and about 2% in stamp duty.  Montenegro does not have a capital gains tax, which makes it very attractive to buyers.  Property taxes and rental income taxes are also quite low.  Rental tax runs at about 15% and property tax rates are less than a percent in many cases.  All of these facts draw interest and generate confidence and commitment in the property market in Montenegro.

With low property price entry rates and much international attention focused upon the real estate market in Montenegro, the nation is fast becoming one of Europe’s most attractive real estate investment hotspots.  As the country moves forward with its progressive programmes for development and economic improvements, many believe the spotlight will remain on Montenegro for years to come.