Montenegro, the hot new playground for the super-rich

Smart marinas and gorgeous hotels are making this tiny Balkan country the latest luxury destination for the super-rich says Eric Corsaletti.

Gliding across the azure waters in a classic motorboat offers an air of undeniable glamour, especially when surrounded by majestic mountains and quaint villages with terracotta roofs lining the shores. The journey from Porto Montenegro's radiant marina to the iconic Bay of Kotor presents a breathtaking panorama; navigating the bay's entrance reveals Perast's charming stone houses, set against the backdrop of towering mountains. This scene, reminiscent of a Norwegian fjord under the Mediterranean sun, is truly a sight to behold from the sea.

Such opulence, sophistication, and affluence are precisely what Montenegro aspires to offer its visitors. Through its ambitious tourism strategy, this compact nation, spanning just 13,000 square kilometres with a population of 600,000, aims to become a rival to Monaco, attracting Europe's elite and the world's wealthiest.

The Montenegrin coast is rapidly developing, adorned with marinas, luxury accommodations, and a plethora of new homes, alongside a comprehensive infrastructure that includes everything from high-end boutiques and eateries to medical facilities and educational institutions. The race to acquire land by the globe's premier hotel brands is a testament to Montenegro's burgeoning status as a luxury destination.

How (and why) to Buy a Luxury Property in Montenegro

Who is investing in Montenegro's real estate, what are their origins, and what priorities guide their purchasing decisions?

For more than a decade, Montenegro has emerged as a sought-after destination, celebrated not just for its vacation allure but also as a prime locale for property investment. The country's inviting climate, renowned hospitality, an array of fine dining options, and unparalleled natural beauty continue to captivate international interest.

There's a local adage that those who visit Montenegro are bound to return, a testament to its irresistible charm. What could be more fulfilling than coming back to a place you can call your own?

This draws an increasing number of international buyers to seize the advantageous financial terms offered, opting for their slice of heaven in this stunning European country. Even amidst other popular destinations, Montenegro's luxury properties remain more accessible, promising a blend of dream realisation and the enjoyment of life-enhancing amenities, extending beyond just a holiday retreat.

The flourishing real estate sector in Montenegro, more robust than ever since the 2008 financial crisis, owes much to its ability to attract affluent clientele and the development of new luxury complexes that capture global attention.

"Montenegro offers some of the lowest tax rates in Europe for both businesses and individuals, no capital movement restrictions, and a cost of living substantially lower than in Western Europe or North America. Starting a new company here is remarkably straightforward,"

Let's add that the standard property tax rate ranges from 0.25 to 1 per cent of the market value on an annual basis, except for exceptions when it amounts to up to 5 per cent. This means that all buyers will be able to get the most out of their investment and achieve a higher return.

Spotlight on Key Developments

Porto Montenegro

Porto Montenegro, often hailed as the jewel in Montenegro's luxury real estate crown, epitomises the country's ambition to cater to the super-rich. Its sophisticated marina, luxury boutiques, and waterfront residences are a vibrant testament to Montenegro's luxury lifestyle offering. The development's success has spurred further investment, promising even greater growth.

Porto Montenegro recently announced its most exclusive project to date. The Synchro Yards, built on the site of a former shipyard, includes exclusive residences with sunset views over the bay, and a unique five-star hotel IVO.

In the Aeris building, with 22 residences on five floors, you can find one-bedroom, two-bedroom, three-bedroom or four-bedroom apartments and penthouses, and in the Aurora building, part of IVO 5* Hotel & Residences, owners are waiting not only for several pools and restaurants but also a global network of privileges.

Prices range from 15,000 EUR to 24,000 EUR per square meter.

 

Emerging Luxury Developments: Luštica Bay and Portonovi

Beyond Porto Montenegro, developments like Luštica Bay and Portonovi are gaining attention for their unique offerings. Luštica Bay, with its world-class golf courses and stunning Adriatic views, offers a serene escape, while Portonovi, with its partnership with the One&Only brand, adds a new dimension of ultra-luxury living. Both projects offer attractive financing plans, making luxury living accessible to a broader range of investors.

Lustica Bay

Luštica Bay, a residential complex that captures both admiration and plans, offers an unparalleled opportunity with its five-year, interest-free real estate repayment plan. This allows for the unique option of either moving into or renting out its stunning seafront properties before completing payments.

Take, for instance, The Peaks, a premier golf residence providing breathtaking panoramic views of the Adriatic Sea and its meticulously designed golf course by the renowned Gary Player. Here, a 106-square-meter two-bedroom apartment is available for purchase at 740,000 EUR under a buyer-friendly repayment scheme. With just a 10% down payment required, the remainder is spread out into 15 quarterly payments over five years.

Portonovi

Portonovi extends to prospective owners globally a five-year repayment framework, necessitating a 20% initial deposit for its apartments and villas. Consequently, an opulently appointed one-bedroom apartment within the Marina district, spanning 82 m2, is available for purchase for as much as 755,000 EUR. Those viewing luxury real estate as both a path to a serene, rewarding lifestyle and a sound investment will find the homeowner property management program in Portonovi especially appealing.

Increasing number of residents in Montenegro

There is a big shift in demographics happening in Montenegro that isn’t quite captured by government statistics but is extremely important to understand.

Though Montenegro is very dependent on tourism, it is becoming less so. Why? Because an increasing amount of people are moving to Montenegro full-time. The full-time population of Montenegro unofficially grew by about 10% since the start of the war in Ukraine.

These are the typical archetypes:

Russians fleeing conscription or who want to work online without getting banned from payment processors and online platforms due to Russian residency. Many entrepreneurs as well are starting local businesses.

Ukrainians who are independently wealthy or work online. Ukrainians who want free government money or a job move to Western countries. But people who are independently wealthy or work online prefer low-tax countries such as Montenegro. Montenegro has the highest number of Ukrainian refugees per thousand inhabitants in all of Europe.

Turks who disagree with politics back home. All are entrepreneurial and are starting local businesses. Right-leaning Western Europeans who disagree with politics back home and want to live in a country that leaves them alone. Many moved to Montenegro during COVID-19 as the restrictions were minimal and poorly enforced. Many more moved after the Ukraine war started. They flee what they perceive to be censorship in their countries.

Western Europeans who want lower taxes and/or a lower cost of living. As inflation ate away at people’s savings in Western Europe, many realized that one way to beat inflation is to lower one’s tax bill and living expenses. It’s important to note that Montenegro offers both low taxes and a low cost of living as long as one avoids the luxury resorts mentioned earlier.

Anglos (Americans, Canadians, Australians, Brits, South Africans, etc) who want to live in Europe but realise that obtaining residency in the EU is often hard and/or not tax-friendly. In comparison, it is very easy to obtain residency in Montenegro.

All these people are much better than tourists. Some pay income tax, and social security taxes, but all pay VAT and drive the local economy through year-round consumption. These immigrants are all a net positive for the economy. They barely use any social services and instead consume locally, pay taxes, start businesses and are overall a true blessing for the Montenegrin economy which is now much more vibrant. The international school business is booming in Montenegro with several private English and Russian schools along the coast.

Effectively, the Montenegrin economy has become a lot less seasonal. We’ll see this in some real estate figures a bit below.

Also important to note is that all these people are fleeing something. If you believe that we are in an increasingly chaotic world with more people leaving their home countries, Montenegro is set to become a net beneficiary of such a trend.

Great for Digital Nomads

This is a big boon for Montenegro. Many digital nomads are very happy to spend a few months every year in Montenegro. It’s affordable, the weather is great, and there is a lot to do.

Importantly, Montenegro is outside of the Schengen zone. Effectively, this attracts a lot of relatively high-earning digital nomads from North America and other countries who cannot spend more than half the year in the Schengen zone. They thus come down to countries such as Montenegro to recharge their “Schengen days.”

Prospective EU membership and extensive infrastructure development

Ever since I’ve been coming to Montenegro people have been saying Montenegro will join the EU. First, I was told 2022, then 2023, then 2025, then 2028, and now I hear 2030.

The lesson is, don’t listen to real estate agents when they come up with overly optimistic forecasts.

The reality is that Montenegro has been doing great without the EU and that prices of real estate have risen without EU accession. For now, Montenegro seems to benefit from the EU development aid and free infrastructure, as well as implicit financial support, without losing its tourism-, immigration-, and business-friendly orientation, which is the key to its success.

As Montenegro continues to evolve into a prime destination for the wealthy, it offers a unique blend of natural beauty, luxury living, and significant investment opportunities. From the stunning bays of Kotor to the upscale developments of Porto Montenegro, Luštica Bay, and Portonovi, Montenegro is carving out its niche as the ultimate destination for those seeking the epitome of luxury and an unmatched quality of life. With its strategic location, favourable economic conditions, and burgeoning luxury real estate market, Montenegro's ascent as a top choice for the world's affluent is just beginning.

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