Montenegro challenges Croatia for Adriatic crown

Resort development is rife in the tiny Balkan nation. Louise Dransfield and Kate Hughes report

Montenegro, apparently, is the next big thing. Its visitors range from Hollywood A-listers to British chart topping singer Emeli Sandé, who reportedly was recently married there.

Having put its war-torn history behind it, Montenegro regained independence six years ago after the break-up of Yugoslavia and today there's little doubt of the country's charm with its sapphire sea, dramatic peaks and Venetian-inspired historic walled towns.

The World Travel and Tourism Council has predicted that Montenegro could have the world's fastest growing tourism industry, with 10 per cent year-on-year growth over a 10-year period. Half the size of Wales, with a population of approximately 600,000, this Adriatic nation is tipped by some to rapidly emerge from behind the shadow of its neighbour Croatia as the next property hotspot.

The property market is still in its infancy and therefore could represent good value for money compared with its more developed rival, says Aleksander Kovacevic, the head of sales for Foresight Montenegro. "The coast of Montenegro is a match for Croatia yet everything is close by as it is a small stretch of coastline," he says. "Even to go skiing, you are only two hours away from a big ski resort, which is very convenient."

Needless to say, development is well under way, and some might say that the country is rapidly becoming dependent on foreign direct investment that could leave it being susceptible to the effects of external economic factors, not to mention fluctuations of trade and import in the immediate and fragile aftermath of a global downturn from which Montenegro wasn't entirely immune.

But Mr Kovacevic argues the country has managed to avoid much of the fall-out from the economic crisis and worldwide recession that others in Europe did not.

"It didn't get the fall like other locations such as Spain and Greece," he says. "Before the crisis, Montenegro had a very high boom in prices and they were rising too fast and getting ridiculous. Now it has slowed down and prices have normalised. Buyers have stopped paying the inflated prices."

For British investors there's also the effect of dealing with a euro weakened against sterling. And, in the past 10 years the laws regarding foreign property purchasers have been simplified to promote the equal treatment of foreigners and domestic buyers.

Today, purchasing costs in Montenegro include a non-refundable reservation fee of approximately ¤5,000 (£4,020) offset against the purchase price, the cost of a lawyer, notary and translation fees. There is also Real Estate Transfer Tax (RETT) on resale properties, which is 3 per cent of the value of the property and is payable by the buyer. The value of the property is determined by the local municipality tax authority and usually matches the price listed in the sales contract.

Mortgages are available in Montenegro through a number of partner banks ranging in amounts from ¤50,000 to ¤300,000 with a maturity of one to 25 years.

One example of property in the pipeline is the Boka Group's Sea Breeze (seabreeze.me) development in Kavac – a few minutes' drive from prominent attractions including the Unesco-listed walled town of Kotor, Porto Montenegro, a luxury marina development, and the PuroBeach Club, plus two planned PGA golf courses.

The 50 two and three-bed, stone and terracotta villas at Sea Breeze are expected to sit on a sloping hillside with views over Kotor bay, surrounded by olive and pine groves. Prices start at ¤399,000 for a 210sqm two-bed villa up to ¤899,000 for three bedrooms. Rental returns are expected to start from ¤1,500 a week for the smaller villas and from ¤2,500 for the larger properties.

Clearly then, developers are going after the luxury market. "But even the luxury market needs a range of offerings," says John Kenney, a co-founder of the Boka Group. "We are focusing on price-competitive quality. What people want are detached properties, with pools, large living areas and spectacular views. These are the key elements that give a strong re-sale potential and a competitive advantage, especially when it comes to lettings."

The country's charms and financial attractions aren't news to a number of existing investors in the southern European country. "The Russians have already discovered Montenegro and it is a Russian dominated market, accounting for approximately 80 per cent of our buyers, but there is also an increase this year back from the UK and Irish markets," Mr Kovacevic says.

But, he adds that not every buyer is an oligarch and developers have had to quickly adapt to changing investor profiles.

"We're seeing a lot of lower budget buyers nowadays, it is not very wealthy Russians with tons of money," he says. "It's middle-class people looking for larger apartments – second homes basically.

"That's what is good with the Sea Breeze development as it matches the gap in the market," he claims. "We previously only had expensive villas or cheap apartments and this is basically a villa for the price of an apartment – something that has been in demand for the past two years."

Rival firm Orascom Development is in the middle of planning for Lustica Bay, which it says, will be nothing less than a fully integrated town 10km from Tivat, just across the water from Sea Breeze in Traste Bay. When complete it should feature apartments, villas, townhouses, a golf course with golf homes and two marinas.

Meanwhile Aman Resorts seems to be targeting the high-worth property investor by creating a luxury resort and spa at nearby Sveti Stefan, until recently a fishing village, and a number of well-known hotels, such as the Regent, are also in various stages of development on the site.

Discover more property articles at Homes and Property
PROMOTED VIDEO
Property search
Property search
Have you tried new the Independent Digital Edition apps?
iJobs Job Widget
iJobs General

Ashdown Group: Marketing & Sales Manager

£40000 per annum: Ashdown Group: A reputable organisation within the leisure i...

Tradewind Recruitment: Science Teacher

£90 - £140 per day: Tradewind Recruitment: I am currently working in partnersh...

Recruitment Genius: Doctors - Dubai - High "Tax Free" Earnings

£96000 - £200000 per annum: Recruitment Genius: Looking for a better earning p...

Recruitment Genius: PHP Developer

£32000 - £36000 per annum: Recruitment Genius: A rapidly expanding company in ...

Day In a Page

Isis hostage crisis: The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power

Isis hostage crisis

The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power, says Robert Fisk
Missing salvage expert who found $50m of sunken treasure before disappearing, tracked down at last

The runaway buccaneers and the ship full of gold

Salvage expert Tommy Thompson found sunken treasure worth millions. Then he vanished... until now
Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Maverick artist Grayson Perry backs our campaign
Assisted Dying Bill: I want to be able to decide about my own death - I want to have control of my life

Assisted Dying Bill: 'I want control of my life'

This week the Assisted Dying Bill is debated in the Lords. Virginia Ironside, who has already made plans for her own self-deliverance, argues that it's time we allowed people a humane, compassionate death
Move over, kale - cabbage is the new rising star

Cabbage is king again

Sophie Morris banishes thoughts of soggy school dinners and turns over a new leaf
11 best winter skin treats

Give your moisturiser a helping hand: 11 best winter skin treats

Get an extra boost of nourishment from one of these hard-working products
Paul Scholes column: The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him

Paul Scholes column

The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him
Frank Warren column: No cigar, but pots of money: here come the Cubans

Frank Warren's Ringside

No cigar, but pots of money: here come the Cubans
Isis hostage crisis: Militant group stands strong as its numerous enemies fail to find a common plan to defeat it

Isis stands strong as its numerous enemies fail to find a common plan to defeat it

The jihadis are being squeezed militarily and economically, but there is no sign of an implosion, says Patrick Cockburn
Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action

Virtual reality: Seeing is believing

Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action
Homeless Veterans appeal: MP says Coalition ‘not doing enough’

Homeless Veterans appeal

MP says Coalition ‘not doing enough’ to help
Larry David, Steve Coogan and other comedians share stories of depression in new documentary

Comedians share stories of depression

The director of the new documentary, Kevin Pollak, tells Jessica Barrett how he got them to talk
Has The Archers lost the plot with it's spicy storylines?

Has The Archers lost the plot?

A growing number of listeners are voicing their discontent over the rural soap's spicy storylines; so loudly that even the BBC's director-general seems worried, says Simon Kelner
English Heritage adds 14 post-war office buildings to its protected lists

14 office buildings added to protected lists

Christopher Beanland explores the underrated appeal of these palaces of pen-pushing
Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Scientists unearthed the cranial fragments from Manot Cave in West Galilee