Podgorica, Montenegro

(Podgorica, 8th July)The independence brought dynamic changes to Montenegro, especially when it comes to real estate market. An inflow of money and a bigger demand caused unrealistically high prices, and extremely high investors’ margin, as well, which is not the case in the mature markets. However, this sky-rocketing prices period is over.

The main demand driver over a past year was a domestic population group that migrated to Podgorica. In addition to that a large segment of the market was affected by favorable credit policies and lower interest rates.  Moreover, citizens in the coast sold their properties to foreigners and bought apartments in Podgorica.

With rapidly growing interest for apartment purchase, the sale prices were raising during 2007 and in the first quarter of 2008 and sale prices in Podgorica marked 5-10% increase in the same period. However, sale prices decrease approximately 15-20% during the second half of 2008. Effects of global financial crisis that started in October 2008 in Montenegro have been contributing to this decrease despite that the cycle of the property market was implying by itself a potential reduction.

Small apartments continued to be in the highest demand in 2008. The statistical data indicate the growing share of smaller apartments, that is to say, 1BR-and 2BR apartments form the most popular size. However, sales were reduced due to effects of global financial crisis by the end of 2008.
Regarding the current real estate market situation, Andreas Marambos, Managing Director of Colliers International Montenegro and Colliers International Greece says: “The Montenegrin real estate market has been facing big changes. It should be said that the residential market depends on recovery of the financial market that will stimulate the local cycle of the residential market. Hence, it is not easy to give any forecast. Based on the current market conditions, the reduction of sales volume will have a direct influence into rents. Such a case will increase the yields that reflect and quantify the risks that purchasers and investors anticipate”

About Colliers International

Colliers Macaulay Nicolls Inc. (CMN), operating as Colliers International, is a leading global real estate services company that provides a full range of services to real estate occupiers, developers and investors worldwide. The organization’s 12,700 employees span the globe in 294 offices in 61 countries.  On a worldwide basis, Colliers manages more than 1 billion square feet and has revenue of $1.6 billion.  Services include brokerage, property management, hotel investment sales and consulting, corporate services, valuation, consulting and appraisal services, project management, mortgage banking and research.  Colliers International is a worldwide affiliation of independently owned and operated companies.  Locally, Colliers professionals serve clients throughout [service area]. Find out more at www.colliers.com/[local].

Contact Information

montenegro@colliers.com

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