The World Travel & Tourism Council has predicted that Montenegro will have the fastest growing tourism sector, in the world over the next 10 years. We asked Aleksandar Kova, Head Of Sales, Savills Montenegro how this will effect the property market?
There is no doubting Montenegro's charm. Its historic Venetian walled cities, beautiful coastline, picturesque bays and soaring mountains have attracted the rich and famous for many years – ranging from film starlets in the 1950s to popstars and celebrities from stage and screen – and now it seems others are beginning to catch on with tourist numbers predicted to be the fastest growing in the world according to the World Travel & Tourism Council (WTTC).
All this is good news for the property market, which is tipped by local agent Aleksandar Kovacevic, Head of Sales at Savills Montenegro, as the next property hotspot. He says: "The property market is still in its infancy and therefore represents good value for money when compared to Croatia and Italy. Prices in Montenegro are currently about 40% lower than Croatia and we also benefit from being part of the Euro zone, which with the Euro weakened against Sterling provides further value.
The government is focussing on elite tourism, and is keen to avoid the over development that has blighted other European country coastlines, so is granting planning permission mainly to high end hotels and developments. It's all about quality not quantity. With supply of new property still at a low level and demand high, especially from the Russian market, the value of property is preserved, with long term growth predicted. This year, the luxury villa development Sea Breeze in Kavac launched and is already selling well, as its filling a gap in the market for good quality larger properties.
In 2012 Prices gained 5% in places with super prime properties and low cost properties being the most resilient. On the whole top end luxury villas with wonderful sea views or front line apartments are selling best. The Old Town of Kotor with its medieval beauty is starting to recover and could be a great tip for the future – it will never be repeated – it's like buying exclusive art.
In 2013 we are expecting a good growth in transactions and moderate growth in appreciation. Many of our clients are lifestyle purchasers and the price of the property is not the first concern typically. More important is that the property ticks the lifestyle boxes. Areas such as Kavac will take off with excellent villa products such as Sea Breeze. Front line in Budva with its newly master planned high end resort offering product such as The Adriatic Project, is expected to do very well.
I would recommend buyers look at off plan product which offer buyers protection- it is the perfect balance between risk and reward in Montenegro. For example new developments such as Sea Breeze are offering payment plans where the buyer pays in arrears at each stage, and has the title deeds to the property after the first payment. Luxury high end product should appreciate 15-20% on completion when purchased at today's prices. And there is no capital gains tax locally.
Montenegro is very keen to attract investment and I don't anticipate any changes in 2013 that would change this. The last thing we need is to change laws to turn away potential buyers or try to complicate the market. With the right partner, everything here is clear and concise. Montenegro benefits from a sophisticated land registry system dating back to the time of the Austro Hungarian Empire and therefore a number of the issues found in other Eastern European countries surrounding title to property are eliminated.
It's a pleasure to do business here and we expect things to get even better as the new cabinet do everything possible to ensure Montenegro continues to punch above its weight in the future, and attract investment. Many new 5 star hotel projects are underway and commencing in 2013 which will give a real boost to tourism and property markets. Low costs airlines, including Ryanair are expected to enter Montenegrin skies in 2013 from London airports. Our neighbours Croatia will enter the EU which will make it Montenegro's turn next."
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