Property buyers are flocking to Montenegro as the government launches a new citizenship by investment scheme, with
property purchases including a one-year residence permit.
Luštica Bay, the rapidly expanding Montenegrin marina town, has reported a staggering 86.3% increase in average prices in the completed Marina Village since sales started in 2012.
Construction is now focused on Centrale, the commercial and administrative hub, and cultural centre. Upon completion, the coastal town will feature 2,000 residences, seven hotels, two
marinas, an 18-hole golf course and lifestyle facilities.
The €1.1bn marina development, which is the first greenfield development in Montenegro, boasts some of the lowest square metre prices in Europe, with average rental yield in Montenegro reaching approximately 7.5%. These returns are
comparable to many European countries, and are even higher than those in Croatia, Spain, Portugal, Cyprus and Greece, and only beaten by Moldova and Ukraine, neither of which can
compete with Montenegro’s natural environment, tourism and economic potential. According to some industry sources, such as Dream Montenegro (associates of Savills), the prices of
non-prime homes in the coastal region have risen from €1,000 to €3,000 per square metre due to the influx of luxury residential developments.
One of the most attractive benefits of buying property in Montenegro—whatever the value—is that it comes with a one-year residence permit. Additional financial perks include the fact that the tax system has become one of the most attractive
in Europe, with a flat-rate income tax, and 9% corporation tax. Buying and registering property is easy, and foreign investors are treated equally to Montenegrin citizens. Montenegro’s annual property tax is a mere 0.1% to 1%.
Furthermore, buying and selling is always conducted in Euros, limiting risks associated with foreign exchange. A further alluring factor for some is that Montenegro is likely to be the next country to join the European Union (EU), though
Montenegro already uses the Euro currency. EU membership offers stability and integration which can greatly benefit tourists, residents and investors. Montenegro’s ascension to the EU is planned to occur by 2025.
Ahmed Zaki, Head of Sales & Marketing at Luštica Bay commented on the impact of this exponential increase in interest in Montenegro on the world stage: “There has been a staggering year-on-year increase in sales at Luštica Bay of
more than 100%, with a significant shift in demand towards more expensive units, and surge in leads of 385%, which is more than the last three years combined. We are delighted to have now sold over 300 units to buyers from 38 different nationalities.”
International buyer demand is expected to continue rising, due to the launch of new flight routes from across Europe, including from Brussels, Krakow, Munich, Frankfurt, London,
Oslo and Stockholm, the Far East, as well as the launch of direct flights from the United Arab Emirates. With an average of 270 days of sunny weather every year, and 293km of spectacular coastline, it isn’t difficult to understand why
visitors are so drawn to Montenegro.
Currently, Montenegro is attracting a lot of international attention due to the government’s plans to launch a new citizenship by investment scheme. Citizenship by investment offers individuals the opportunity to obtain Montenegrin nationality, in return for investment in the country’s real estate, in addition to a donation to fund an aspect of its development.
donation to fund an aspect of its development. The scheme is set to launch this year, but the details are still being finalised, and it is likely that the programme will be limited to just 2,000
applications and the proposed scheme to run for only three years, thus ending in 2021. Regarding travel and tourism, Montenegro is one of the fastest-growing tourist economies in the world, with approximately a 10% year-on-year increase in tourists, with total tourist numbers reaching more than 2 million in 2018, with almost 12 million overnight stays last year. Montenegro is also ranked by the World Travel and Tourism Council as number three in the world for tourism
growth, with a 12.7% year-on-year increase in visitor numbers. In addition, Montenegro has an ever-growing reputation as a high-end luxury destination, with the launch of the five-star Chedi as testament to this. While owners and guests at Luštica Bay enjoy embracing the Montenegrin saying: ‘Samo Polako’, which means ‘to slow down and live in
the here and now’, the construction rate will continue to increase at pace until the long-term vision reaches its planned competition timeline, with the seventh hotel aimed to be completed by 2032.