Montenegro Property Potential Being Ripped Apart

Oh magical, marvellous and majestically magnificent Montenegro (sorry!), what are you doing?  On the one hand you have everything and then some going for you – a flourishing tourism industry that is going the right direction to become a booming and thriving tourism industry for example, as well as significantly strong levels of foreign direct investment.  And then on the other hand you risk tearing your fledgling real estate industry apart with inter political party quarrelling about who has the right to buy what.

In recent weeks there has been a heated debate raging in Montenegro about whether foreigners should have such liberal rights to purchase what they like in Montenegro in terms of real estate, and all of this fighting means that Montenegro’s property market could potentially be ripped apart.  But – that might not be such a bad thing!  We actually think that some of the politicians in Montenegro have got a very good point…

As it stands, Montenegro looks like this – it is emerging as an attractive place for foreign investors to place their cash into real estate and tourism projects in particular and reap positive returns.  The tourism market is growing rapidly – the World Travel and Tourism Council predict positive annual growth that should reach a very robust average of about 4.5% by 2012 – and it is being helped along by announcements such as Montenegro Airlines stating that it has slots for direct flights from Gatwick from June.

The fact that Montenegro was featured in a recent Bond flick and has been positively publicised internationally as an attractive and interesting place to visit hasn’t hindered the tourism market growth either.  And on the real estate side of things – well, some massive names have invested in developments and the key words in Montenegro are ‘high’ and ‘end’!  I.e., massive money is being encouraged to be ploughed into massive developments.  And here’s where the problem seems to lie…

The laws in Montenegro are quite clear-cut – one cannot invest in immovable property if one is a foreign individual – only foreign commercial entities can purchase property in Montenegro – but as is the way of the world, where restrictions exist so do ‘work arounds’, and as a result the real estate scene in the country is littered with Russians and some British and American buyers too for that matter.  The larger ruling party in the coalition that is in power wants to rapidly expand upon the significant economic successes they have already reaped by easing the laws pertaining to foreign individuals’ rights to own real estate in the nation.  Their argument is that there are plenty of ways for individuals to flaunt the laws already, so why not update them!

We can understand their point – after all, during a recent eleven month period, 53% out of a total of 900 million euros in Foreign Direct Investment that entered Montenegro went directly towards the acquisition of property!

But – the smaller coalition ally is up in arms about the fact that national assets such as forest and parkland, beaches and waterfronts are being and are at further risk of being sold off forever, and landing up in the hands of individuals or entities who have only their own profits in mind rather than the future of Montenegro and the Montengrin people. 

Well, sorry, but we’re with the smaller coalition ally on this one!  It’s all well and good to have a strong and healthy real estate industry – but it has to be an ethical and sustainable industry that encourages responsible behaviour.  Come on Montenegro, get with the program!!

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