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Montenegro…on the road to recovery

7th June 2021

Montenegrin economy has contracted significantly in 2020. However, the country is beginning to open up for business and personal travel once again, with over 30% of the population expected to get vaccinated by the high summer season, companies operating in the service industry following the containment and control guidelines strictly and applying for “safe travel” certificates, and international flight routes to Podgorica and Tivat having commenced since the month of May.

Assuming that consumer and business confidence are restored as Covid-19 is brought under control and that political instability eases, the World Bank predicts “the total output loss due to the crisis to be fully recovered by 2022, when the economy is realistically projected to grow 4.2%”. This gradual recovery in 2021 and 2022 is expected to be driven by planned investments in tourism and the energy sector, as well as public and private construction activity and the completion of the import-dependent motorway section. The Government-anticipated tourism recovery of 55% on 2019 numbers, should support export and consumption growth as well.

The community of foreign investors already operating in Montenegro have not slowdown or abandoned their investments during the Covid-19 crisis. Examples include continued investment in prime real estate developments such as Lustica Bay, Porto Montenegro, and Portonovi which continue to bring new product and introduce new brands into the market.

The general stand is that Montenegrin economy is attractive, has a strong potential growth and industry diversification possibilities, with measures currently being undertaken to enhance the transparency of administration and human capital, improve digital transformation, ensure predictable business environment, build stronger institutions and invest in regional transport and energy infrastructure integration. The country is also expected to join the EU in near future as Montenegro has opened the last chapters in the negotiation process.

Residential Real Estate

The residential real estate investment globally dropped significantly in 2020 due to Covid-19 related travel restrictions and economic uncertainties, when investors focused on their local, easily accessible markets and low-risk properties.

According to IM PROPERTY GROUP (Montenegro’s property specialist and property investment adviser with more than 12 years of experience in the market), the most sought-after residential properties in 2021 were those which enabled investors and their families to work from home and focus on personal health and wellbeing:

– provided excellent internet connection

– private outdoor space or proximity to public green areas (such as beaches, hiking or biking paths, forests or parks)

– easily accessible yet more isolated out of town locations

– good rental potential (to families, senior citizens, outdoor lovers, work nomads)

– excellent, health-focused property management service

At IM Property we believe that this trend is likely to continue in the post-Covid period and is something developers in Montenegro will need to take it into account when brining new product into the market no matter the country that buyers come from.

As the countries globally open up for safe business and leisure travel once again, we expect to see more travellers and potential investors coming to Montenegro in 2021, to experience this wonderful “Adriatic escape, smaller than Northern Ireland, yet bursting with snow-capped mountains, jewel-box lakes, rushing rivers, charming towns, and gregarious locals”, as described by the National Geographic in their “Traveler’s Top Family Destinations List for 2021”.

This will lead to a gradual increase in site visits, regulated in-person meetings and to the openness of investors to invest in prime projects in a country with ample potential.

We look forward to being your safe destination of choice this year!

Welcome to Montenegro!

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