Property: prices and processes
Property and land prices offer the most notable opportunities for outsiders with more than just a great vacation on their minds. The most useful comparison to make is with the Croatia’s trajectory, which Montenegro is set to follow. Coastal Croatia, to Montenegro’s north, is about four years ahead of coastal Montenegro and stagnating, which in concrete terms means 4,000 Euros per square meter in Dubrovnik compared to 1,500 in Montenegro.
Interest in Montenegro is driven by western ‘fly to let’ and second home purchasers put off by over developed and over priced traditional markets such as Spain and Portugal. Of the ‘new’ destinations in Eastern Europe Montenegro stands out because of noticeable a lack of high-standard accommodation and sensible building restrictions.
There are no restrictions on foreigners buying property although to buy land, foreigners must register a local company (which they can wholly own). Any good local lawyer can help with this.
Most foreigners buying in Montenegro use local estate agents. When dealing with such agents, remember to apply the same caution as you would back home – check references and build trust before agreeing to buy through a particular agent. It is often a good idea to shop around to check prices and deals before deciding to go with a particular one. An alternative is to buy direct from the developer, cutting out agent fees.
Buying in Montenegro is a two-step process – firstly signing the purchase pre-contract and contract with the seller and secondly registering the purchase in the property ownership register.
In detail, the first step is to agree a price with the owner. You may choose to do this directly, or through an estate agent. Remember that if you chose to do this yourself, it will involve several sessions of drinking Rakija, a type of local brandy that locals are especially proud of! Each family will have their own home made version which will need to be drunk with appreciative murmurs. Bring a companion to help with the drinking otherwise you will be paying more before you know it…
Once the price is agreed, it is normal to sign a pre-contract and pay a 10 per cent deposit, obliging both parties to sign the main contract in 30 days time. If you, the buyer, fail to sign the main contract, you will forfeit your deposit. If the seller fails to sign the main contract, he must pay you twice your deposit back. 30 days later you will sign the main contract.
The next step is to use the signed main contract to register your purchase in the property ownership register – again, any good lawyer will be able to help with this.
Types of property
New build property is in short supply – especially property fitted out to Western standards. The typical Montenegrin apartment built for locals will be much smaller than Westeners are used to and will lack amenities such as a swimming pool. Many Montenegrins still can’t understand why anyone would want to have a swimming pool if you live within 5 km of the sea!
Consider rentability when you are buying – the current shortage of new Western quality apartments means that these can attract a substantial premium on the rental market.
Cute old stone farmhouses are in short supply now and both ruins and restored properties attract a premium.
Where to buy
Most opportunities are found in coastal villages.The main hot spots in Montenegro are around the bay of Kotor, from Herzeg Novi to Tivat. Further south, there are very interesting locations south of over-developed Budvar, running to Petrovac.
Baosici and Djenovici for example are 3 – 6 km from Herceg Novi and extend south from Herceg Novi to the ferry across the fjord. They have attractive stone houses along the waterfront, and newer small apartment buildings set in large green gardens slightly further back. These sleepy villages typify the Mediterranean as it was, with small sandy beaches, fishing boats in tiny marinas, and small cafes and restaurants right on the sea. Luxury off plan apartments to western specifications are being offered by UK developers such as Pluto Developments in Baosici if you are keen to get away from it all and also keen to avoid time consuming negotiations for extant properties or land, as all negotiations are handled for the buyer. Prices range between 138,000 Euros (2 bed, 2 bath) to 155,000 Euros.
Other areas include the villages of Muo and Prcanj, 2 – 8 km from Kotor. Old stone houses line the water front behind small marinas with boats bobbing in them all year round. Prcanj is the site of the Hotel Splendido, one of the most pleasant hotels in the Bay of Kotor. Find old fisherman’s houses on the waterfront on a newer building slightly up the hill with fantastic views over the bay. Some properties in
Muo have the benefit of stunning views straight over the Old Town of Kotor.
Finally, look into villages around Budva. Budva itself is the most developed area of the Montenegrin coast and is more popular with Russian and Israeli buyers than with Western Europeans. However there are many small villages up and down the coast from Budva that offer attractive home buying potential.
If you’re more of a town dweller then Kotor Old Town with stone houses in medieval streets is be very enticing. However, the atmosphere is countered by its tendency to be dark and noisy with bars and restaurants thoughout.
Tips for buying
Montenegro escaped the troubles of the 90’s unscathed and has not had large flows of population in and out of its borders (unlike in many other parts of the former Yugoslavia, such as Croatia). This reduces the risk of uncertainty of title deed. Along the whole of the coast of Montenegro, the land registry has complete records of ownership and any good lawyer will be able to check the ownership history of any property or land that you are considering.
Watch out for properties with multiple ownership – such as old farm houses jointly owned by large families. Even if you have a deal with Jovan, his brother Branko will probably want something different and negotiations will be back at square one. To avoid wasting time (and excess Rakija consumption), make sure that one owner has legal authorisation to represent all the others.
If you’ve ever had the feeling that you’ve missed the boat on other emerging markets, Montenegro could offer you an opportunity at exactly the right moment. Not so much undiscovered as sidelined in recent times, it’s poised to steal much of the limelight from its more well known neighbour, Croatia. Very soon the red tape will be loosened, opaque planning laws will become more transparent and the next five years will witness one of the most dynamic growth rates for property in the world.
INFORMATION ON PLUTO’S BAOSICI VILLAGE DEVELOPMENT
The Baosici development is an exclusive self-contained apartment with only 31 two-bedroom apartments, each with a sea view, set in traditional Mediterranean low-rise buildings within a gated community, 100m from the sea.
Baosici Village combines modern construction methods with the traditional architectural style in Montenegro. The five small buildings are laid out around a quiet and peaceful common garden and pool with features such as white washed walls, red sloping roofs, shuttered windows and vine-covered terraces. Each building contains a maximum of two apartments per floor and there is one duplex-penthouse in the tower.
The apartments are designed with the western investor and holiday maker in mind. Light, open plan living spaces open with sliding doors onto private terraces each with a view of the sea. Each apartment has two bedrooms with fitted wardrobes, and two bath rooms (at least one of which is en-suite).
Each kitchen is in a separate room and benefits from natural light and a ventilation system. Each apartment has at least one private terrace with a sea view. Apartments come with fully fitted bathrooms, split-system air-conditioning (heating & cooling), wooden parquet flooring in the bedrooms and quality ceramic tiles on all other areas.
Communal spaces
All green spaces and communal terraces are planted with palms, olive trees, and other local greenery making a verdant and peaceful living space. Towards the rear of the complex there is a children’s play area.
A fully staffed reception desk makes Baosici Village ideal for those wishing to rent their apartment out - the onsite staff will be able to organise key collection, cleaning and other vital services.
Baosici Village provides two car parking options – a private underground car park and a smaller communal parking lot towards the rear of the complex. Spaces in the underground car park are available for purchase.