Construction companies in Montenegro are thriving due to high demand for new apartments, yet paradoxically, around 70,000 apartments remain empty while many citizens struggle to afford housing. Apartment prices in Montenegro have surpassed those in Italy, Spain, and Portugal, making them unsustainable in the long term.
Economic analyst Predrag Zečević notes that foreign buyers, especially from Russia, Ukraine, Serbia, and Germany, drive demand, while builders artificially keep prices high. This year has seen a decrease in issued construction permits, indicating a potential slowdown.
Architect Borislav Vukićević explains that rising prices in neighboring countries, along with increased construction material costs post-COVID, have pushed local prices higher. Average prices in Montenegro’s new developments reached approximately 2,158 EUR per square meter, with prime locations in Podgorica exceeding 3,000 EUR.
The affordability crisis is stark: a young couple would need a monthly income of about 4,500 EUR to comfortably service a mortgage for a 50-square-meter apartment priced at 150,000 EUR, far above the average local salary.
Zečević also highlights concerns about money laundering through real estate, identifying construction, gambling, and cryptocurrencies as high-risk sectors.
Social inequality is pronounced, with rising living costs and monopolistic pricing affecting essentials like food. There are calls to tax vacant properties and multiple real estate holdings to address speculation and underutilization, but progress on such measures has been slow.
Overall, Montenegro’s housing market is complex and in need of deeper analysis to address pricing, accessibility, and regulatory challenges.
