Montenegro, Stabilization of the real estate market is underway

Published on 25. March 2023., News

After the chaotic situation with huge demand and abnormally high prices on the domestic real estate market, which prevailed last year, there was a slight stabilization of the market, according to representatives of real estate agencies.

They said that in Podgorica the demand for buying apartments in the first two and a half months was slightly lower than last year, but that there was no drop in prices, which remained at the new prices from the last quarter of 2022.

They stated that interest in apartments on the coast is less than 35%.

The owner of the Multitask real estate agency, Stefan Mišković, said that the current market is still very active with signs of entering a calmer phase, unless some unpredictable changes occur again, to which Montenegro, as a small market, is sensitive.

He stated that apartments for rent are still in demand, but now the offer is somewhat better than a few months ago.

– This is where we are entering stabilization and we can expect a slight drop in rent, but certainly not a return to the level from before February last year. And the demand for buying apartments is slightly lower than at the same time last year, when inflation, geopolitical circumstances and the fear of the spread of war across Europe influenced money to be invested in more stable guardians of value, which real estate certainly is – announced Mišković.

According to him, based on the transactions within his agency, the price per square meter remained at the level of the last quarter of last year, so the average price of apartments in Podgorica is EUR 1.5 thousand per square meter.

– Prices range from EUR 1.1 thousand for old buildings to EUR 2 thousand for new buildings in more sought-after locations. Exceptions are joint construction, where the square meter is around EUR 700, as well as luxury buildings where the square meter is EUR 2.5 thousand – specified Mišković.

He stated that there are a number of reasons for the increase in prices in previous years, but the main ones are global inflation, the increase in the price of construction materials, the increase in wages due to the application of the Europe now program, as well as high demand due to the increase in rent prices.

– Expectations are that sales prices will remain at this level for the next year or two, and we can expect a slight drop in rent. Although there is still a lot of interest in renting, the prices are lower because the offer is higher – Mišković said.

The executive director of the Montenegro prospect agency, Ivan Dašić, said that in the first two months of this year, prices were 35% lower.
– The reasons are both global, in the form of recession in Western Europe and America, hints of a crisis in the financial sector, and local, which are mostly reflected in the increase in prices compared to the beginning of last year, which mostly happened due to last year’s expansion of demand. For agencies, this trend means that they have to make increased efforts in order to reach the necessary number of inquiries and clients – said Dašić.

He added that compared to the beginning of last year, the prices of apartments and houses have increased by 20 to 25 percent.

Dašić stated that Herceg Novi has quite a diverse offer and apartment prices range from two thousand to 2.5 thousand EUR per square meter, and for better locations three thousand EUR.

– Tivat is popular and the prices are from 2.5 thousand to 3 thousand EUR per square meter, while in the exclusive zone of Donje Lastva the prices range from 3.5 thousand to even 5 thousand – said Dašić.

In Kotor’s Old Town, the price per square meter is EUR 4,000, in Stoliv, Prčanj and Mu, 2.6 to 3,000 EUR, and in Dobrota, Ljuta and Orahovac, 2.8 to 3,000 EUR.

– In the narrow center of Budva, a square meter in an older building costs EUR 3.5 thousand, and in a new building it costs EUR 4 thousand. Outside the exclusive zone, a square meter will cost from 2.5 thousand to 3.5 thousand EUR, while in the Bečići – Rafailovići zone, the price ranges from 1.9 thousand for an older building to 4 thousand for a new building – said Dašić.

He stated that In Bar, an old building that needs renovation can be found for 1.6 thousand EUR per square meter, while a minimum of two thousand EUR should be allocated for a new building.

– If the tendency of less interest in buying real estate compared to last year persists for the rest of the year, the market will have to react by reducing prices, although one of the main characteristics of this market is price inflexibility, that is, a slow response to price reductions in response to real reductions demand – concluded Dašić.