Montenegro’s coast is booming again. Cranes stretch across Budva, Tivat, Kotor and Bar. Seafront plots are being snapped up, residential complexes rise in clusters, and investors — from the Balkans, Turkey, Israel, Russia, the EU and the Middle East — are pouring capital into a coastline where each patch of land seems destined for a new apartment block. Property prices have surged to historic highs, surpassing many Adriatic regions with larger economies.
On the surface, it looks like success — a country attracting foreign capital, expanding its tax base, and growing its urban footprint. But local analysts in Vijesti, Monitor and Analitika warn: beneath the boom lies a fragile and uneven system that may be drifting toward speculative imbalance.
At the centre of the boom is demand — both domestic and foreign. Montenegrins increasingly see real estate as the safest store of value, especially amid global inflation. Foreign buyers, meanwhile, are attracted by Montenegro’s euroised economy, favourable tax regime, EU-membership trajectory and lifestyle appeal. Yet the scale of purchases often has little to do with local demand dynamics and everything to do with external capital flows.
The problem is simple: Montenegro is building for foreign buyers and investors, not residents. In Budva and Tivat, new apartments remain dark for most of the year. In Kotor, locals are priced out of areas where families have lived for generations. In Bar, the pace of development has outstripped the ability of schools, hospitals, sewage systems and transport arteries to cope.
Infrastructure is the first pressure point. Sewage overflows during peak tourism season. Roads choke under seasonal traffic. Public utilities are stretched thin. Coastal municipalities often lack the long-term urban-planning capacity to enforce responsible zoning or regulate density. Developers promise integrated systems; municipalities struggle to enforce delivery and maintenance.
Then there is the environmental dimension. The Montenegrin coast — one of Europe’s most beautiful — is fragile. Erosion, waste-management stress, habitat disruption and construction runoff threaten ecosystems already under pressure from tourism. Critics argue that Montenegro risks sacrificing its greatest asset — untouched natural beauty — for short-term real-estate gains.
The social consequences are equally significant. Young families cannot afford coastal housing. Service workers commute long distances. Seasonal workers face unstable rents. As property prices decouple from local incomes, coastal towns lose residents and become part-time cities dominated by foreign-owned apartments. This undermines community life, weakens social cohesion and increases economic volatility.
Economists warn that Montenegro may be entering a classic bubble pattern: rapidly rising prices, speculative construction, and excess supply of luxury units that do not match demographic realities. The danger is not imminent collapse — Montenegro retains demand — but long-term distortion, in which the economy becomes too dependent on real estate as the primary growth engine.
To correct course, experts recommend several measures: enforce stricter zoning; expand affordable-housing schemes for residents; limit high-density coastal construction; invest massively in sewage and transport infrastructure; and diversify into year-round tourism, maritime services and green industries.
Montenegro’s coast is booming — but whether it becomes a model of sustainable prosperity or another cautionary tale of overdevelopment depends on decisions made today.
