The crisis hasn’t been kind to Montenegro. According to the International Monetary Fund, the country’s economy contracted by seven percent in 2009. With a quarter of the Montenegrin economy relating to tourism and the property sector being one of the main drivers of growth prior to recession, the government is actively looking for real estate investors. The hope is that such investments will increase employment and bring long-term capital to the struggling economy. And it seems its wishes are coming true – though this is perhaps not surprising considering the country’s massive potential.
Luxury potential
It is going to be a busy autumn on the Montenegrin coastline with numerous new resorts and marina developments springing up, particularly in the area between the Bay of Kotor in the north and the island of Sveti Stefan, near the popular Budva resort. These include Porto Montenegro’s super yacht marina and accompanying development of holiday homes near Tivat; Orascom’s development of a marina, town centre, commercial facilities and 2,350 apartments over 6.8 million square metres on the Luštica peninsula, also near Tivat; and The Royal Montenegro Grand Resort near Sveti Stefan.
Close to Porto Montenegro lies perhaps one of the most attractive developments in the country – the island of Sveti Marko, the only ‘island resort’ in Europe. The island used to belong to Club Med but will now host a Banyan Tree hotel, 100 bungalow villas, and 74 more spacious villas as well as boutiques and entertainment premises – all due for completion by 2014. The bungalow villas will cost from EUR 420,000 and will be sold on a leaseback basis. This is in line with the government’s efforts to make its property market more attractive for investors by introducing new models of properties to sell including leaseback, timeshare and fractional.
As the recession seems to be easing in the development aspect of the sector, prices have stabilised following a surge in the summer of 2008. Some developers are now willing to give 30 percent discounts on already lowered prices and some sellers would go as much as 50 percent lower, depending on the urgency to sell. The prices vary – while a tiny studio in Kotor old-town would cost over EUR 200,000, a 100-square metre apartment in Herceg Novi old-town would cost the same. New turnkey apartments cost from EUR 900 per square meter upwards, depending on location and closeness to the sea.
The other side of the coin
But the news isn’t uniformly good. Miramax, the Russian development company, is reported to be moving out of its offices in Budva. The company has been at the centre of corruption charges over its Astra Montenegro development on the attractive hill of Zavala near Budva. The luxurious development has seemed doomed from the very beginning with reports that building works were started without acquiring the regular building permit. With 60 percent of construction now complete, Miramax has run out of cash and the works have stalled since last year. Those who have paid EUR 6,000 per square metre in advance for apartments that are now unfinished are looking for justice.
This is not the sole example currently shaking the Montenegrin property market. Banks in Montenegro are following in the footsteps of their European partners and making it almost impossible to acquire a loan. The result is that the number of unfinished sites for sale has increased. While developers elsewhere have proved reluctant to lower their prices and preferred to wait for better times, those in Montenegro are willing to acknowledge the current realities of the market. As a result, bargains can be found. The other explanation for this willingness to lower prices is the lengthy procedure of acquiring planning permission in Montenegro. This means that land owners who had to wait for their building permits during the worst of crisis now have land they bought cheaply available for sale – complete with planning permission.
Though the coastline remains the main attraction for investors in Montenegro, the north of the country is increasingly becoming popular with profit seekers, especially the areas around Bjelasica, Komovi and Durmitor mountains. In short, there are many attractions in Montenegro – and it seems the country is attracting the right investors to justify its impressive ranking by Lonely Planet.
http://www.sloveniatimes.com/en/inside.cp2?uid=DBD3E4C3-C8CE-3108-5EF0-961AA5E8D5A6&linkid=news&cid=AF88828F-AB51-3532-9238-96209D725982
No comments:
Post a Comment