Apartment rental prices have reached infamous heights. Last year shook the budgets of the resident who rents an apartment, because the prices for renting a studio apartment in Podgorica range up to an incredible 350 EUR, and for a one-room apartment, believe it or not, up to 900 EUR, in a country where the average salary is slightly above 700 EUR . Nevertheless, the expectations are that there will be a drop in rental prices, and the real “cooling” from the “obscenely” high prices will only take place in 2024.
Stefan Mišković from agency Multitask nekretnine in Podgorica tells CdM that the average price of a studio apartment is around 250 euros. In the less attractive parts of the city, that range is from 200-250 euros, while in the more sought-after parts of the city, these prices are at the level of around 280, up to even 350 euros. An average one-room apartment is rented for around 420 euros.
– There we have the largest price range from 250 to even 900 euros, depending on the location, the level of equipment of the apartment and the building in which the apartment is located. So that apartments near Capital Plaza, below Gorica, and the area around the BIG fashion center have a slightly higher price, and it is difficult to find a one-bedroom apartment under 500 euros, while the more luxurious ones are equipped at the level of 600 to 700 euros. A two-bedroom apartment ranges from 450 to 1000 euros, again depending on the location and level of equipment. On average, around 700 euros – points out Mišković.
31% more expensive
According to him, the rent prices for a one-room apartment in Podgorica in the last quarter of 2022 amounted to EUR 414 on average, which is even 31% more than the year before, when they were at the level of EUR 315. Sales prices also increased in the same period, from EUR 1,300 to EUR 1,450 per square meter, which is an increase of just over 11%.
Miskovic says that last year was characterized by a price boom due to several reasons, the main one being the arrival of Russian and Ukrainian citizens and their demand for real estate, primarily for rental purposes.
– As a fairly small market, 15,000 foreign citizens with residence have seriously affected demand and price growth in the market, with a general price increase and inflation of almost 20% – he states.
No further growth Is expected
Mišković notes that the current situation on the market in terms of renting apartments has reached a certain zenith and he does not expect further growth in rental prices.
– In the last thirty days, the market is normalizing in the sense that we have a slight drop in demand and a slightly better offer, which in the period before that was at a very low level, and literally everything that could be found in the offer was rented. Given that rent prices do not follow the standard of living and average salaries in Montenegro, I do not expect that they will be maintained at this level, especially since most of the apartments that are traded are mostly bought as investment properties for further rent, so I expect that in the course of In 2023, and especially during 2024, we will enter a more peaceful phase when it comes to prices, and that they will experience some decline, i.e. harmonization with the standard of living – he states.
Mišković states that this is ungrateful to forecast because we are a small market, and even the smallest shifts on the geopolitical level have strong implications for us as well.
– So no one could predict the COVID crisis, as well as how the consequences of the war in Ukraine will affect the market of real estate in Montenegro – believes the interlocutor of CdM.
As for the sales price of real estate, Mišković believes that it will be maintained at this level in the next 12-24 months. Further, it will depend on the demand and volume of investments in this sector, i.e. will this trend of growth in construction continue or will investments slow down. He adds that, given the rise in interest rates, it is expected that the volume of investments will decrease.
Calming the market
Mišković announces that, given that there are several large construction projects underway in Podgorica in several locations, with several thousand square meters, the market is expected to calm down after their completion.
– I think that after that we will enter a phase where we have no further room for growth, and that is already in 2024. That is when all the big projects will be completed and when it is delivered to the market, we will certainly enter a calmer phase as far as rental and sales prices are concerned – he says .
He adds that apartments are now sold at average prices of around 1,450 to 1,500 EUR per square meter.
– Some new companies that are breaking into the market offer apartments for 1,300, 1,350 euros. The part of the city from the Temple, Vizier’s Bridge to the BIG fashion center in the new building is at the level of around 2000 EUR per square meter. The average price at the city level is not an authoritative data because the price depends significantly on the location, so we have discounts of up to 600 euros per m2 within Podgorica for the same quality of construction – Mišković concluded.