Montenegro – Why invest here?

As 2020 saw the world up-ended by pandemic-induced travel restrictions, many investors looking to stash their cash in a cross-border bolthole, holiday pad, or buy-to-let were no doubt forced to place buying decisions on hold. However, international buyers are expected to return to property hotspots this year as vaccination programmes gain momentum and investors re-assess their post-lockdown brick-and-mortar portfolios.

Investing in Montenegro

Kate Everett-Allen, head of residential research at UK property group Knight Frank, says housing markets in major cities across the globe are likely to benefit from a wave of international demand as travel and quarantine rules are relaxed.

She says second-home and buy-to-let sales could be further underpinned by record-low global interest rates, softer pricing, and currency volatility. Mortgage repayment and tax holidays, which have left surplus cash in investor’s pockets, will also boost demand.

But clearly the world has changed. Everett-Allen cites a number of new trends that could influence the demand, supply, and return prospects of individual housing markets. For instance, the decline of international students and the switch to remote learning has led to a drop in rentals in some cities, which is likely to continue to impact buy-to-let returns — at least in the short-term.

Investment management Montenegro

On the flipside, demand for holiday homes and weekend getaways is set to strengthen in resort markets across popular sun and ski belts — from Aspen to Barbados to Cannes — no doubt on the back of a newfound appreciation for travel freedom and global mobility. Also, the rapid rise of the “digital nomad” and an increasingly mobile workforce will prompt more countries to introduce so-called “golden visa” or “citizenship-by-investment” programs. The UAE, for instance, recently announced its intention to introduce such a scheme this year.

Amanda Smit, managing partner of international migration-investment advisory firm Henley & Partners in South Africa, says her company saw a massive jump in inquiries about property-linked investment migration options in the second half of last year. Though Portugal and Malta still rank as the most popular residency-investment destinations among South Africa’s high-net-worth individuals, Smit says interest in Montenegro in the Balkans and St Lucia in the Caribbean are gaining traction too.

Located below Croatia in southeast Europe, Montenegro only recently started to appear on our radars following the local government’s introduction of a citizenship-by-investment programme two years ago. The former Eastern Bloc country offers Montenegrin citizenship to foreigners in exchange for a direct investment starting from €350,000. It includes a cash donation to uplift underdeveloped areas as well as an investment into an approved real-estate-development project.

Herceg Novi, Montenegro

Smit says a key attraction of Montenegro’s investment programme is that it offers a relatively quick and easy route to a second passport: full citizenship for the applicant and family members (spouse, minor children, and dependent adult children over the age of 18) can be obtained within roughly six months. Only one visit to the country is required to provide biometrics and no physical stay is necessary. She says applications are nevertheless subject to a stringent vetting and due diligence process, including thorough background checks.

Lustica Bay, Tivat

Travel freedom within the Schengen area, among others, is a major drawcard. So, too, is the fact that Montenegro is an official EU candidate country with EU membership expected to be granted in 2025. That means citizenship offers the potential future right to live, work, and study in any EU member state. The country is also an attractive holiday destination. With its rugged mountainous landscape, medieval villages, and traditional Venetian architecture, it’s not surprising that Montenegro has become a magnet for adventure travellers. It also offers a mild climate, laidback Mediterranean lifestyle, low cost of living, and a multinational community. Moreover, its former Communist legacy has been replaced by political and economic stability.

WHAT TO BUY:

Those interested in staking a claim in Montenegro shouldn’t linger too long as its citizenship-by investment programme will be limited to 2,000 applicants within a three-year period. Besides an economic contribution of €100,000, investors are required to splurge a minimum of either €450,000 into an approved real-estate development in the capital of Podgorica or in the coastal region of Montenegro; or €250,000 into an approved project in the northern or central region of Montenegro. Cape Town-based immigration and financial-services company Sable International is currently marketing Porto Montenegro, a luxury residential and marina development in the Unesco-protected Bay of Kotor. The mixed-use project comprises 320 waterfront units, a 450-berth super-yacht marina, and about 80 retail outlets. The development offers a 24-hour concierge and reception. Prices of studio, one-, two- and three-bedroom units range from €276,000 to €3-million.