What Russian would not be interested in such a beautiful landscape?
The Montenegrin authorities are rushing to adopt laws and regulations governing construction, obliging investment and construction companies to comply with strict requirements regarding the height and architecture of buildings and to push residential construction further and further away from the coastline. And from the new year, acts come into force aimed at strengthening the fight against "dirty money" and requiring buyers to provide information on the origin of funds. But the government's current efforts cannot protect the country – and, above all, its 280-kilometer coastline – from turning into a large construction site or curb the rapid rise in prices: there is a real boom in the real estate market in Montenegro.
And here is what is interesting: until now, in no country in the world have Russians been the "number one" investors. In Montenegro, they have even surpassed the ubiquitous British, the shrewd Irish, and the wealthy Scandinavians. Having bought up real estate in Magnitogorsk, a wealthy Russian can afford to also take a look at the pearl of the Adriatic coast – Montenegro.
What attracts citizens of the former Soviet Union to the youngest state in the Old World? Which cities in Montenegro should potential real estate buyers pay special attention to? What problems will they face? This is discussed by Sergei SANDER, managing partner of the company "Russian Switzerland".
How did the Russians defeat the British?
Indeed, a boom, a real boom. And indeed, everything is mainly being bought up by Russians, who, having gained "boom" experience in Croatia, arrived in Montenegro earlier and got involved in the process more actively than the British and Irish.
The explanation is very simple: first of all – visa-free entry. While for Croatia you need to show a tour operator voucher and hotel booking, Montenegro lets you in simply with a passport, where they don't even affix a visa, just a stamp.
Secondly, until recently, prices for Montenegrin real estate were not as high as in Croatia and other European countries – our compatriots simply came with cash and bought plots and houses. Moreover, they were far from millionaires, and it is through their efforts that Russian streets and mini-neighborhoods have appeared in Montenegrin cities. True, now that the market is becoming structured and prices are constantly rising and starting to "bite," I think the process will become more orderly.
The third important point is the similarity of languages. Spain, Cyprus, Italy – there is a huge difference in mentality between them and us, and none of our real estate buyers strive to learn Spanish or Italian. In Montenegro, if the local population shows even a little desire to remember Russian (and the older generation definitely studied it at school), no communication problems arise. And a person who wants to live or work there for a long time will start speaking after spending at most two to three months with a phrasebook.
As for temporary restrictions on the stay of foreigners, they exist in Montenegro, as everywhere else. Under international law, if a foreigner resides in a country for more than 180 days, they begin to be considered a resident with all the ensuing consequences. But the fact is that in Montenegro nobody particularly controls this process: some foreigners just live there as long as they want, others open businesses, officially obtaining all necessary permits. But in any case, there are no checks – "how many days have you been in the country?" – no.
As is known, Montenegro, which practically has no large industrial enterprises, is an ecologically clean country whose priority direction of development is tourism. In the coming years, everything in Montenegro will revolve around tourism, and even the "development" funds from the EU will go primarily to creating tourist infrastructure, including for residential tourism. That is point four.
It is believed that the main vector of Montenegro's tourism development is directed south, encompassing the Budva area and everything south towards Bar. There are many natural bays here and almost no artificial beaches, so when looking for a "house by the sea," one should not compare Montenegro to the Caribbean. In this country, everything is small and natural, which is what is emphasized. And whether spoiled tourists accept this as "the best" is another question.
What? Where? How Much?
The Montenegrins themselves believe that the most interesting places are the Becici area, including the world-famous city of Budva and the bay near the island of Sveti Stefan, Petrovac, Kotor and Herceg Novi, a well-known resort in the southern Adriatic at the entrance to the Bay of Kotor, and Igolo.
In my opinion, the main competition is between Budva and Petrovac: nearby there is one of the unique bays protected by UNESCO. I would say that the most popular place at the moment is still Budva, a tourist center where life is bustling and the majority of tourists are concentrated. Previously, in the elite ranking, Herceg Novi was much higher than Budva, but old-timers recall that after the war many refugees moved to this resort, and the city became... unclear. Plus, Herceg Novi is "open water," while Budva is a bay where the sea is cleaner, warmer, in short, more pleasant.
So, regarding Budva: near the shore, in the old town, practically nothing is left. That is, absolutely nothing – meaning there are no more free plots for construction, since there was practically no space there, and the buying up of the most popular coastal land has been active in recent years. Now in one of the largest cities in Montenegro with a population of about 50-60 thousand people, the central part and the mountain slopes are being built up.
As for apartments and flats, everything that has been built is already sold, and what is currently being constructed (including luxury housing) will be sold over the next two years. It is worth noting that Budva has already developed a 'seasonal' problem of traffic jams, caused not so much by the number of people as by the traffic management system: all roads here are single-lane, and in summer it is almost impossible to drive. How comfortable such living is, is a big question.
The next very interesting place, located in the neighboring bay – Becici (although geographically it is also Budva). Becici is one of the most elite areas of Montenegro - for example, the largest, most luxurious hotel in the country today was built right here. Until recently, Montenegrin hotels were at best 4-star (these '4 stars' in terms of European standards actually only 'pulled' two or three, with the exception of a few good hotels). But first, in Becici, the Queen of Montenegro was built, which stands not on the sea, but on a hill. Below, there was a free plot of land; a Russian company won the tender and built the Splendid hotel (the project cost about €60-70 million). Two adjacent plots have already been reserved for Sheraton and Hilton.
Accordingly, as soon as Splendid appeared in Becici, prices skyrocketed. But in fact, there is no room for construction here either - 2/3 of the bay is occupied by large hotels or plots allocated for large-scale development. And everything else – restaurants and small hotels. Against this background, houses under construction with beautiful facades on the first line stand out, where prices are already reaching €5,500 per square meter. Many apartments are sold out long before construction is completed.
However, plots located on mountain slopes are also of interest. Here, up top, some Americans are appearing, buying up huge plots, developing them, and selling them 'to their own people.' And in general, it is very difficult to understand anything: there are countless developers, they set their own rules of the game, the market offers everything – from land to ready-made apartments, and everyone trades as they see fit. Prices have crossed the €3,000 mark.
The next notable bay is the one where the famous island of Sveti Stefan is located, which is a true wonder of nature. The bay contains some of the best beaches in the country. And the Montenegrins themselves call the bay the most romantic place in Montenegro. To get there, you have to go through a forest strip – a closed nature reserve, where there are practically no hotels, only a couple of houses.
The second half of the bay is given over to elite development, where, they say, even the Prime Minister of Montenegro and other VIPs buy property – that is, one can expect favorable neighbors. In fact, the claims about the elite nature of this place sound... funny. Why? Currently, construction is taking place at the very end of the bay – 4-5 houses are at the final stage, with prices starting at €6,000. Further on, there is a small beach, completely unimproved, and then, on a very steep slope – a few more houses. This elite bay completely lacks infrastructure! Just to eat or have fun, you have to drive 10-15 minutes to Becici or Budva. In general, the bay resembles places that, due to their quietness and seclusion, are usually preferred by retirees.
It is worth separately discussing such places as Petrovac, Kotor, and Herceg Novi, which are actively promoted on the international market. Kotor is a 20-minute drive from Budva. The place is fantastically beautiful – a very deep bay on the slope of which the city is built. The old town is both larger and taller than Budva – there are many churches, a university, the most famous night club 'Maximus', in short, everything is very good. The only downside – there are practically no beaches, only small beaches.
With prices, as usual, it is unclear. In Kotor, two apartment complexes are currently under construction. The first was practically sold for €2,000 per square meter, the second already for €3,000. No one knows what the price will be in a few months: the development company has offices not only in Montenegro but also in London – so it sells its product to both Russians and English.
Herceg Novi is the place where all the main SPA centers, mud clinics, the largest military hospital, etc., are located. In terms of climate, this resort is something between Sochi and Lugano: palm trees, cypresses, flowers. Next to the Plaza hotel, one of the state companies is now building the 'Savina' center – a huge apartment complex located on a steep slope and descending from the mountains straight to the sea. Prices – €2,000 per square meter. Two houses in 'Savina' have already been built, the foundations of the rest have been laid; the Montenegrins work quickly – they plan to finish by June. And by that time, I think prices will double (in fact, the complex could easily be sold for €3,000 per square meter even now).
In Herceg Novi, there are also unique projects. For example, several villas standing on a hill: small, on tiny plots of 2-3 ares, but so beautifully made and organically fitting into the landscape! I went inside, talked to the workers doing the finishing: it turns out that here too, the owner is Russian.
There is only one problem – transport. In Herceg Novi, there are two ways: you can take a ferry as a continuation of the route from the airport, or if you decide to go around the bay, the trip will take about an hour and a half - in season, there are often traffic jams on the roads. True, road construction is now a priority task for the Montenegrin government. Due to the short length of the coastline, the authorities plan to build high-speed mountain highways literally in a couple of years to solve the transport problem once and for all.
And if you are unlucky?
A very popular topic now, which Croats are developing more actively than Montenegrins, is housing in the Old Town. The houses there are indeed ancient, stone, beautiful, but in very different conditions: sometimes renovated, sometimes not. Such offers are for enthusiasts. Understandably, it is very prestigious to live in the Old Town. But, as a rule, there are no good beaches there; you have to cover a considerable distance to reach the “civilized” sea. And in the old part of Kotor there are no beaches at all.
The second problem is noise, a result of tourist congestion. It is only said that bars and restaurants work until twelve or one o’clock; in fact, tourists can party all night. Is it comfortable to live in such conditions? As for prices, here as usual, everyone does as they please. In old Budva, they may ask you for €5,000 per square meter, or much more, or much less – depending on your luck.
What to believe? Whom to trust?
The Montenegrin market is certainly very attractive, but there are no fewer problems here than obvious advantages. The first and main one is the cleanliness of documents. Many specialists complain that often the documents are something unimaginable – no seals, no watermarks.
Related to this is the search for an answer to another question: which company is more trustworthy – private or state-owned? For example, local residents have great trust in the state company that is developing in Herceg Novi – it builds a lot, with quality, and on time. However, private investors hint: what if tomorrow one or another state structure becomes a joint-stock company, and construction drags on indefinitely?
A problem often arises because many developers ask buyers to make 100% prepayment. And if something bad happens to the developer? To this, Montenegrins usually say: “No, no, that doesn’t happen here, you can safely sign a contract.” But serious investors still prefer to wait until construction is finished, and only then make full payment, even despite significantly higher costs.
Understandably, local realtors check the documentation, but they are not really able to ensure the reliability of developers. There have indeed been no high-profile, open bankruptcies so far, but that is only for the time being. There is also no complete information about how many developers operate in the country, how many have failed, what delays they have had in construction – so it is difficult to analyze the situation. One has to rely on the integrity of specific realtors and owners and the reliability of the information they provide to the client.
The second serious problem is the absolute lack of price structure in the market, where everything literally “flies off” at the construction stage. Each time the owner sets a price for a plot that he considers fair. Architects, builders, designers, etc., approach pricing in the same way. The market turns out to be spontaneous: if somewhere Russians have “passed through” and bought land at a price of, say, €25,000 per 100 sq. m, then the owners of the neighboring plot will try to sell it at a higher price – that’s the whole mechanism. Moreover, in Montenegro, as in many countries, individuals can register buildings in their name, but land can only be purchased by local residents or local companies. And this, of course, also creates additional inconveniences.
Finally, no one yet knows how long Montenegro’s EU accession process will take, and even more so – which path the country will take. Already now, the main currency here is the euro, which, by the way, fuels price growth. On the other hand, it is convenient – foreigners do not need to think about currency conversion. But if Montenegrin legislation is brought into line with EU requirements and standards, this will primarily affect the procedure for entering the country and the stay of foreigners.