As IA Rosbalt writes, our compatriots came not only to sunbathe and lounge on the beaches, but also to look for a "cottage in the village." Especially those Russian retirees whose children succeeded in business and preferred that their parents and grandchildren spend time in a safe and healthy ecological environment.
As is known, the peak of the tourist flow and the boom in real estate purchases in the country of Zeta (as Montenegro was called in ancient times) occurred in 2007-2008. Enterprising Russian businessmen bought everything that came to hand, almost without looking. For example, one-story unfinished buildings in the suburbs of the town of Herceg Novi, 40-50 square meters, were snapped up like hotcakes for 40-50 thousand euros. The calculation was that prices would creep up even more, and one could make money on resale. Some even took significant loans from banks and invested them in Montenegrin real estate.
As it turned out a few years later, such real estate hung on many as an exorbitant burden, or even became a financial noose. The boom passed, and prices, instead of continuing to creep up, even at moderate rates, began to stagnate and then fall.
There were many reasons for this cold shower. And, above all, the policy of the Montenegrin authorities towards real estate buyers. (It should be noted that Western private investors wishing to purchase a villa, house or apartment on the Montenegrin coast of the Adriatic Sea could be counted on the fingers of one hand. The lion's share of applicants has always been Russians.) The point is that when Russians began to actively invest money in the country, the local authorities promised them mountains of gold. The decisive argument in favor of the Montenegrin choice was this: if you have real estate, you can easily get a so-called boravak, that is, a residence permit, and renew it without problems. However, since 2009, when Russians had already bought many houses, apartments, and land here, everything changed dramatically. The Montenegrins adopted a new law under which foreigners living here were forced to leave the country every 30 days.
The so-called one-year boravak could only be obtained by those who presented a work certificate. Well, what kind of work is there for Russian retirees in Montenegro? There isn't even enough for young locals—unemployment is rampant. As Tatyana N., a Russian retiree who moved to Montenegro seven years ago, admitted in a conversation with a Rosbalt correspondent, to solve the residence permit problem, she simply had to buy the necessary certificate from local employers (the other way is to find the "right" person at the local immigration service).
The second reason for the decline in interest in Montenegrin beaches and real estate was the accumulated experience of Russians who had lived in the country for several years. It turned out that along with the advantages in the form of weather and nature, there are also disadvantages. Sometimes insurmountable ones. Those, in particular, who bought land and started building on it themselves faced them: bureaucracy and corruption in processing permits are off the scale even compared to Russia. Locals explain this as follows: the country is small, like a communal kitchen, everyone knows each other, the "kum-svat-brat" system works here like clockwork.
In addition, it also turned out that the judicial system practically does not function in the state (this is, in particular, why Montenegro has still not been invited to the European Union). Simple civil cases drag on for decades. As Deputy Prosecutor General of the country Miljana Radović told Rosbalt, "our prosecutor's system differs radically from the Russian one: we do not have the right to interfere in the process as actively as prosecutors can do by law in Russia and the West. We are only now beginning to reform our law enforcement system." Suffice it to say that under Montenegrin law, the prosecutor's office itself cannot initiate a criminal case—it must give such an assignment to the police.
It’s hard to believe, but in Montenegro, even if a court makes a decision and issues an order to local authorities to enforce the law, the same kinship law of "kum-svat-brat" often kicks in: court decisions are not always enforced. Local officials who must strictly honor them pretend nothing happened. Lawsuits over simple and clear construction matters, which are regulated by perfectly adequate laws, drag on for decades. Apparently, according to the proverb: either the donkey dies or the padishah dies.
Another serious reason for many Russians' disappointment in Montenegro was the delays in implementing the law on issuing so-called personal cards (social card for foreigners) to foreigners. Under Montenegrin law, people who have lived in the country for five years (managing to renew their boravak annually) have the right to receive it. It gives them all the rights that citizens of the country have, except for voting rights.
However, local immigration authorities in every way slow down the issuance of such social cards: people, having submitted documents for processing, often wait two or three years to get a response. But according to the law, this issue should be resolved within six months. One of our compatriots, forced to stay in Montenegro only because of health problems (the climate helps), was denied a card because allegedly she lacked one day to five years of stay in the country (continuous residence is taken into account). And it's impossible to prove anything, she says.
It is because of such problems and attitudes towards our compatriots that there has been an active outflow of Russians from Montenegro in recent years. Many, having bought real estate at the peak of the frenzy for themselves or for business, have been unable to sell it for years, not only above but even at the original price.
Although, of course, there are those living on the Adriatic coast of Montenegro who have become attached to it with all their hearts, despite everything. But there are fewer and fewer of them—especially after the well-known events with the Montenegrin authorities' support for sanctions against Russia and joining NATO.
The country is going through hard times today – an economic crisis, compounded by political confrontation in society, has engulfed it. Neither the lagging decision of the authorities (the law came into effect in November of this year) to make all foreigners who own any real estate happy by granting them a residence permit, nor anything else helped revive business, including the real estate market. After all, in practice not everything turned out so rosy: to obtain a boravak (for one year with subsequent extension) you must reside in Montenegro almost without leaving.
According to expert assessments published in the Montenegrin government newspaper Pobjeda, "the real estate market in Montenegro is in a catastrophic state due to a small amount of investment, even smaller demand, high bank loan rates, and a large number of offers, mostly expensive apartments." And Boris Mihajlovic, a consultant on Eastern Europe at the headquarters of the housing company Cechodas and an advisor to the Montenegrin "Solidarity Housing Construction Fund", believes that the situation on the real estate market in Montenegro today is worse than even before the investment boom. Real estate analysts fear that such a downturn may have a boomerang effect, that is, affect the overall economic situation in the country and, above all, the banking sector.
According to Boris Mihajlovic, there are practically no new investments in housing construction, except for a few with participation of communities and those resulting from various types of social solidarity construction (apparently, cooperative construction). The expert noted that even what is offered leaves much to be desired and is absolutely unsatisfactory in terms of quality. Mihajlovic's conclusion is pessimistic: almost all initiatives have stalled, and there is no light at the end of the tunnel. "Given the current geopolitical events," the expert believes, "it is unrealistic to expect a significant increase in foreign demand for Montenegrin real estate in the foreseeable future."
As Pobjeda notes, there are almost no foreigners interested in buying property in Montenegro. "Foreigners are buying almost nothing," says Dragan Nikolic from the real estate agency "Imperia". Dušan Rankovic, director of an agency from Budva, also notes that fewer and fewer foreigners are buying apartments, villas, houses, and land plots. And all buyers are from the former Yugoslavia; they don't have enough money to buy expensive real estate of 200 square meters or more.
Interestingly, in all real estate reviews, experts and agents painstakingly avoid using the word "Russians" (who, in fact, created the boom in buying property in Montenegro about ten years ago and on whom this market has relied all subsequent years), preferring the vague term "foreigners".