Unused Property in Montenegro - Opportunities for Investors

Unused housing in Montenegro — missed opportunities and potential for investors

According to the latest census conducted in 2011, there are approximately 120,000 housing units in Montenegro that are not used on a permanent basis. These properties can be divided into three main categories:

1. Completely empty apartments and houses (58,978 units) — housing that has not been rented out or used by its owners for a long time.
2. Temporarily unoccupied properties (51,927 units) — properties owned by owners who live abroad for most of the year or come only for the summer seasons.
3. Abandoned housing (7,051 units) — properties in poor condition that are no longer suitable for living or renting out.

In addition, there is no accurate information on the current condition and nature of use for approximately 2,000 residential properties. The scale of the problem of unused housing in Montenegro is significant and requires a comprehensive approach to solve it. The state and local authorities are taking certain steps in this direction, but the situation remains quite difficult.

Economic consequences and losses for the budget

Idle housing stock not only does not generate income for its owners, but also deprives the state of significant tax revenues. According to experts, the budget of Montenegro annually loses about 32 million euros in unpaid property taxes. Owners of secondary real estate (houses and apartments) are required to pay an annual tax of 200 euros, but not everyone does so regularly. The lack of effective control over the payment of taxes and low collection rates create an additional burden on the country's budget. In addition to direct losses in the form of unpaid taxes, unused housing also does not generate economic activity associated with the rental, maintenance and repair of properties. This means missed opportunities for small business development, job creation and growth in consumer demand.

Seasonality and regional characteristics of the real estate market

The real estate market of Montenegro is characterized by high seasonality, especially in coastal and tourist regions. Many properties owned by foreigners or locals are only used during the summer, when the country is visited by the largest number of tourists. For example, in the capital of Montenegro, Podgorica, out of 61,860 apartments, about 3,754 are only actively used during the summer months. This situation is typical for popular tourist destinations, where properties are often purchased for recreational purposes during holidays. At the same time, in less popular areas among tourists, the bulk of completely unused housing is concentrated. This creates imbalances in the real estate market and hinders the development of some regions of the country.

Market dynamics and potential for investors

• Despite the problem of unused housing, the Montenegrin real estate market has shown signs of recovery in recent years. The growth in sales of new apartments and houses is facilitated by strong demand from foreign buyers, especially from Russia and Serbia, as well as the state program for obtaining citizenship by investment.
• However, many owners still prefer to hold on to their properties rather than rent them out. The average rental price in Montenegro ranges from 200 to 600 euros per month, depending on the location and condition of the property.
• This situation opens up interesting opportunities for investors willing to acquire unused housing at attractive prices and turn it into profitable rental properties. Renovation and modernization of old apartments and houses can not only bring profit to investors, but also contribute to improving living conditions and revitalizing the local economy.

The role of the state and possible solutions

• The government of Montenegro is aware of the problem of unused housing and is taking certain steps to solve it. In particular, measures are being considered to strengthen control over the payment of property taxes and improve the efficiency of their collection.
• In addition, the authorities could encourage owners of unused housing to rent out their properties by offering tax breaks or subsidies for repairs and modernization. This would help increase the supply on the rental market and make housing more affordable for local residents.
• Another possible solution is the creation of special programs and funds aimed at attracting investment in the renovation and refurbishment of unused housing. The government could work with private investors and local communities to develop projects that would bring idle properties back into use.

In conclusion, the problem of unused housing in Montenegro is a serious challenge for the economy and society of the country. However, it also opens up interesting opportunities for investors and creates potential for the development of the real estate market. To effectively solve this problem, joint efforts of the state, local authorities, property owners and investors are needed. The development of a comprehensive strategy that includes measures to stimulate housing rental, attract investment and improve tax control will gradually reduce the number of unused properties and revive the real estate market. Investors willing to invest in the renovation and modernization of old housing stock can not only get a good return on their investment, but also contribute to the development of local communities and the economy of Montenegro as a whole. Montenegro, with its excellent natural conditions and growing popularity among tourists, has every chance to turn current challenges into new opportunities and become an even more attractive destination for real estate investment.