May 5, 2023

 Perast – The jewel of Kotor – Source: Shutterstock

Over the years, purchasing real estate in Montenegro has proven to be a canny decision for well informed investors which traditionally provided either a sound use of funds to own an appreciating asset with moderate rental returns, an ideal 2nd home – or a mixture of both.

From a macro perspective, the real estate market in Montenegro seems to have weathered many of the storms we have seen in the global markets over the past 3 or 4 years. Lack of supply and a continuation of demand has meant that prices and sales velocities have continued to increase, buoyed on by the Citizenship by Investment program which concluded in 2022. The program brought a significant investment of not just financial capital into the country but also intellectual capital and ongoing interest in the country from around the world, particularly from the US, China, and the Middle East, which is expected to continue as a result.

No guide to investment in Montenegro would be complete without mentioning the enormous political change in Montenegro which concluded in early 2023. The government, which had been in power for more than 30 years, has been replaced by a new coalition of parties and this will take some time to reset the political, institutional, and social system. This may affect large-scale investment into the country for a period. In turn, although Montenegro is constantly moving forward, the momentum is at risk of not keeping pace with the numbers of guests and the shift to a higher wealth guest, in terms of infrastructure and services.

Popular tourist destinations such as Kotor, Tivat and Budva are the areas of mainstream real estate supply, with the mountain ski areas now also receiving considerable investment and interest.  However, as with any investment, it is important that, although the coastline is less than 120km long, the entire market consists of several micro markets, all with their own particular attributes. Perhaps no other market in the world contains so many differences in terms of buyer profiles, price points, supply variations, demand fluctuations and quality of product, in such a small area, as does Montenegro. With this in mind, and more importantly, keeping in mind a mid to long-term strategy for yields and an ultimate exit with maximum returns for any investor, the matter of where you invest is the key to achieving the best ‘bang for the investor’s buck’.

Bride of the Adriatic Sea, Boka Bay – Source: Shutterstock

It would be prudent to say that the rental yields typically max out at 6% net per annum, primarily due to the short length of the tourist season and poor access outside of the season. The main attraction to date for investors has been to catch the upswing in prices, as Montenegro moves from the category of emerging market, to become a solid investment choice, punching well above its weight in terms of geographical size and population (which is around 600,000 citizens).

Over the years, billions of Euro have been invested into prime mixed-use resorts (containing real estate, branded real estate, pure hotels, marinas, retail, etc all in one place) dotted along the coast and these place markers, such as Porto Montenegro (anchored by Regent Hotel and Siro), Portonovi (One&Only), Lustica Bay (Chedi), Amma Resort (Intercontinental), Kotor Blue Bay (Hyatt) and many more, have been the backbone of attracting higher spending buyers and guests to the country.

Just as the market has many variables in terms of geography, the buyer profile continues to change, more rapidly than elsewhere on the Mediterranean. Where in 2015, more than 80% of foreign buyers of 2nd home properties were Russian, today that number is under 20%. The gap has been filled by a much broader base of investors from the local market, regionally and a rich diverse group of others from Western Europe, former CIS countries bar Russia and from the US, the Middle East (particularly Turkey) and indeed from every corner of the world, as the country stepped onto the global stage as a noteworthy investment choice after the pandemic.

There are two types of products, for simplicity purposes in this blog, in the market. Prime and non-prime. Prime properties reside within mixed-use resorts, average above EUR5500 / m2, or can be single waterfront or 2nd or 3rd line properties that meet the expectations of high-end buyers in established markets. Prime property prices can reach as high as EUR30,000 / m2 in a One&Only Portonovi Private Home to EUR10,000 / m2 for key locations within Porto Montenegro, or EUR8,000/m2 at Lustica Bay.

Non-Prime products are further from the coastline, of 3–4-star quality and in multiple apartment complex facilities. The chart below shows the movement of non-prime product over the period from when the market came onto the radar of international buyers and the trajectory is indicative of the progress of each of the micro markets mentioned earlier. The chart for non-prime product is an indicator of the general market trajectory and a similar trend can be seen in the prime market.

With all of the above in mind, here we present the TOP 3 locations where to look to invest to capitalize on the markets which have performed best to date and are expected to continue and where there is significant upside expected in the medium to long term for investors.

1. Kotor Area

Within the walls of The Old Town and walking distance from the town.


Kotor, a city located on the Montenegrin coast, has become a very popular tourist destination in recent decades. With its stunning natural beauty and rich cultural heritage, it’s not hard to see why.

History and culture

Kotor is an ancient city, with a history dating back to the Roman Empire. It is surrounded by walls that were built in the 12th and 13th centuries, and within the walls you will find a maze of narrow streets and stone buildings that are full of history and character. The city is also home to several cultural landmarks, including the Cathedral of St. Trypun, which dates back to the 12th century, and the Maritime Museum, which tells the story of Kotor’s maritime past. Kotor Old Town and the Bay of Kotor have been under the protection of UNESCO since 1979. Investing in Kotor Old town is like investing in art or gold – it’s rare and can never be repeated. Indeed, for short term stays, staying within the walls allows visitors to wake up and walk steps in hundreds of years of history and this uniqueness attracts visitors from all over the world. This is proven by Lonely Planet’s ‘Best in Travel award in 2016, which place Kotor as the number one city in the world to visit. From a rental perspective, average daily rates and occupancy levels have been growing exponentially as a result.

Kotor is located in Boka Kotorska, which is one of the most beautiful natural harbours in the world. The city is surrounded by high mountains that provide a stunning backdrop to the city and the bay. Visitors to Kotor can walk along the old city walls and enjoy the panoramic view of the bay and the surrounding area. There are also several hiking trails leading into the mountains, giving you the opportunity to explore the stunning natural beauty of the area.

Worldwide famous, Kotor Old Town – Source: Shutterstock

Things to do in Kotor.

Surrounded by mountains and sea, Kotor, like few places, offers plenty of attractions and activities, like swimming in the crystal-clear water, cruising, fishing, exploring the hills, caves and canyons of rivers that flow into the sea, or cultural trips that show rich history and cultural heritage of the region.

● Old Town walking tour

● Hiking up to the fortress of San Giovanni

● Walk the city walls.

● Boat cruise in the bay

● Visit Perast and Our Lady of the Rock Island.

● Kayaking in the bay

● Blue Cave boat tour

● Day trip to Lovcen national park with a unique ride and scenery

● Visit fisherman villages in the bay (Muo, Prcanj, Stoliv, Dobrota, Ljuta, Orahovac, Perast, Risan, Morinj etc.)

An Overview of the Real estate market in Kotor

Due to the geographical location of the municipality of Kotor, Kotor offers a wide range of types of real estate and can satisfy everyone’s needs. Whether you are looking for a stone house, a modern villa, or an apartment, as a second home or as a rental investment, be sure that you can find your dream property in Kotor.

Our previous projections for growth over the years within the Old Town walls have been met or exceeded however we are predicting even more price growth and yield improvement over coming years.

Outside the Old Town and within walking / biking distance, front-line or 2nd line properties are also of immense interest. The arrival of the new Marriott hotel to open in 2024 will bring added value to the market and position it as a definite destination for tourism and real estate growth. Together with Old Town property, the front line to the sea property, will always hold its value even in turbulent times as this is an asset class that is increasingly rare in the world. If your budget allows, certainly also see front-line properties as the best investment for the future.

Within the Old Town walls, apartments for renovation can still be found for less than EUR3,000 / m2, which is half the price of neighboring Dubrovnik. Renovated and high-yield producing apartments range from EUR4,500 / m2 and upwards.

Front line or 2nd line stand-alone houses along the shorefront, considered as prime properties, are priced from EUR4,000/m2 and upwards and still represent tremendous value for such properties versus anywhere on the Mediterranean.

Non-prime properties, away from the coastline but still with a world-class view, which have increased significantly over the recent years primarily due to shortage in supply, still have some price growth possible in the mid-term and can still be found for under EUR2,500/m2 in places as resale properties typically – many which were owned by Russian buyers, who are now leaving the market and requiring cash.

We place Kotor as the Number 1 area for investment due to high demand, poor supply, hugely increasing interest as a result of its truly breath-taking beauty and, inside the Old Town walls, which is as much as buying pure art as an asset than real estate as the top tip.

2. Tivat Riviera


Tivat, which is also located in Boka Bay, with its colourful coastal settlements, and stunning natural landscapes, has become one of the most popular tourist destinations in Southeast Europe, mostly thanks to projects like Porto Montenegro and Lustica Bay.

Tivat, in line with our predictions over several years, had grown to be one of the more salubrious destinations on the coast with prices generally doubling over the last 7 years and growth expected to continue, as the market commenced from such a low base for non-prime properties.

Tivat came onto the map, in every respect, with the construction of one of the largest Super Yacht marinas in the world in 2006, at Porto Montenegro.

Originally a port for the navy, now instead of grey warships, you can see some of the world’s most expensive yachts docked here.

Porto Montenegro now consists of the most welcoming marina in the Mediterranean, holder of five Star Gold Anchor award from The Yacht Harbour Association, along with a host of international awards – including Marina of the Year – and UNI EN ISO 14001 certification for environmental protection and quality management. Porto Montenegro at this moment has two neighborhoods: South Village and Boka Place.

The South Village represents the epitome of waterfront living. Both sanctuary and playground, its tranquil, nautically-inspired residences, modern boutiques and galleries, bustling restaurants, cafés and bars make for days that are as stimulating as they are easy.

Boka Place is an innovative vision on the cusp of realization, Boka Place will soon come alive with activity, becoming a vibrant celebration of coastal urban living – a place of spirit, verve and resolve, and a natural home for those dedicated to the pursuit of wellness and contentment.

It is indicative of the interest in the market to acknowledge that the sales velocity rates of residential product at Porto Montenegro, and indeed Lustica Bay, as described below, have traditionally been tracking annually at 3 times that of other similar projects on The Mediterranean, with similar or greater capital values.

Porto Montenegro

Lustica Bay is definitely one of the most unique projects on the Adriatic Sea. Located on the Lustica peninsula, spreading over 690 hectares of land area, 7 kilometers of coastline and only 10% of the land area developed into an integrated town with sophisticated architectural solutions, laid upon innovative technologies and the highest environmental standards.

Lustica Bay commenced development in 2013, and today it features a Marina, Marina Village and Centrale neighborhoods, featuring three beaches.

Lustica Bay, Marina Village – Source: Shutterstock

The Marina and Marina Village offer a true Mediterranean lifestyle. Located on the waterfront built with local stone and surrounded by rich and beautiful gardens with indigenous plants. Life in Marina village is focused around the modern marina with a charming promenade with restaurants, boutiques, the five-star Chedi hotel and an outdoor amphitheatre. The Marina Village thrives with all kinds of events all year round.

The Centrale neighbourhood of Luštica Bay, with its residential buildings, school, bank, fire station and more to come, is quickly becoming the beating heart of the project. Lively streets and a piazza with many shops offer residents a unique lifestyle destination.

Lustica Bay will continue to expand with many projects in the pipeline. One of the most significant projects is the construction of a professional 18-hole golf course, which will be the first of its kind in Montenegro.

History and Culture

Although historians believe that Tivat is the youngest city in the Bay of Kotor, its history dates back to the Illyrian era, which ended in 167 BC. Like the rest of the Bay of Kotor, the area we call Tivat today was influenced by different cultures and empires. The most important of them are Illyrian, Roman, Byzantine, Venetian, Serbian and Turkish.

No one can be completely sure how Tivat got its name, but there are three theories. The first is that Tivat originated from the names of Christian saints that resemble the name Tivat, Sanctus Theodorus, Theodosius, Theodotus, Theodulusor or the medieval names from the 12th century – Teudo, Theodo. Another theory is related to the Illyrian queen Teuta, who had a series of palaces near Tivat, while the third theory suggests that Tivat got its name from the Celtic word “Teudo” which means “city”.

The real cultural and institutional expansion of Tivat begins at the end of the 19th century. Today, Tivat has a vibrant cultural life, expressed through archaeological sites, cultural heritage and cultural institutions recognized around the world.

One of the most important archaeological sites is located on the Prevlaka peninsula, i.e. the “island of flowers”. The first archaeological finds of the treasures of King Balajos on the island testify to the immigration of the Illyrians to these areas. The age of the Roman period is once again confirmed by the findings of the mosaic floor of the Roman villa.

It is difficult to write about Tivat’s cultural heritage without mentioning Kotor’s noble families, who built their cottages and churches. The most famous building in Tivat that represents cultural heritage is the Palace of the Buća family. Buca was a famous and wealthy family from Kotor. They built Buca Palace to spend their free time on hot summer days. The palace was a real display of the Buca family’s wealth. It had high walls, a watchtower and a vineyard that stretched all the way to the sea. Today, the palace is a cultural center with a summer stage and an art gallery in the immediate vicinity.

Things to do in Tivat and its surrounds.

Being the most prestigious destination in Montenegro, surrounded by almost intact nature and old stone villages, there are many things you can do in Tivat.

● Visit Porto Montenegro

● Visit Lustica Bay

● Explore the Lustica peninsula.

● Attend winter/summer events featuring music, gastronomy, tradition etc…

● Hiking up to the village of Gornja Lastva

● Take a long walk on the Tivat promenade.

● Hiking the mountain of Vrmac

● Visit coastal villages like Kakrc, Donja Lastva, Lepetane, Cost of Djurasevici, Krasici….

● Rent a boat, kayak or Sailing boat.

● Attend the summer sailing school at YC Delfin at Seljanovo

Tivat is renowned for its natural beauty, which combines breathtaking mountain ranges and pristine coasts. The town is situated in the Bay of Kotor, surrounded by the stunning Vrmac mountain. Tivat is home to several gorgeous beaches, including the Blue Horizon beach, which boasts crystal-clear waters and is perfect for swimming and sunbathing. The town is also known for its lush greenery, with numerous parks and gardens scattered throughout the area. From hiking in the mountains to lounging on the beach, Tivat offers a wealth of natural beauty and outdoor activities for visitors to enjoy.

An Overview of The Real estate market in Tivat

When we commenced working in 2004, Tivat (the green line in the picture above) had the lowest priced real estate on the entire Adriatic coast.

Today, Tivat is the city with the highest real estate prices from Zadar in Croatia to the southernmost point on the Montenegrin coast, except for Dubrovnik. The chart below covers non-prime real estate as an indicator of market growth and excludes Porto Montenegro and Lustica Bay, where prices average EUR8,000 / m2 and upwards.

When complete, Lustica Bay will have invested in excess of EUR1 billion and Porto Montenegro, EUR600m.

As you can see from the chart above, the rise in real estate prices in Tivat is a causal consequence of the development of the Porto Montenegro and Lustica Bay projects. Clients who previously bought real estate in Budva are now moving to Tivat. It has become a destination and a place for hundreds of new investors. We see the additional potential of this city as Porto Montenegro and Lustica Bay expand.



Herceg Novi is a charming coastal town located in Montenegro, situated at the entrance of the Bay of Kotor. Known for its beautiful beaches, clear blue waters, and picturesque old town, Herceg Novi is a popular tourist destination in the Adriatic Sea. The town is rich in history and culture, with many churches, monasteries, and forts dating back to the medieval period. Visitors can explore the historic town center, relax on the beach, or take a boat tour to discover the stunning coastline and nearby islands. With its mild climate, stunning natural beauty, and rich cultural heritage, Herceg Novi is a must-visit destination for anyone traveling to Montenegro.

Herceg Novi – Source: Shutterstock

History and Culture

Herceg Novi is a beautiful coastal town located in Montenegro, known for its rich history and culture. The town was founded in the 14th century by the Bosnian king Tvrtko 1 and has since then played an important role in the history of the region.

Throughout the centuries, Herceg Novi has been ruled by various empires and kingdoms, including the Venetians, Ottomans, Austrians, and Serbs. This rich history is reflected in the town’s architecture, which features a unique blend of styles and influences.

One of the most notable landmarks in Herceg Novi is the Kanli Kula, a fortress built by the Ottomans in the 16th century to defend the town from the Venetians. Today, the fortress is a popular tourist attraction, offering stunning views of the town and the Bay of Kotor.

Another important historical site is the Savina Monastery, founded in the 11th century and known for its beautiful frescoes and iconostasis. The monastery is still active today and is an important center of Orthodox Christianity in the region.

Herceg Novi is also known for its vibrant cultural scene, with many festivals and events taking place throughout the year. One of the most popular events is the Mimosa Festival, which celebrates the blooming of the mimosa trees in the town and features parades, concerts, and other cultural activities.

Things to do in Herceg Novi

Herceg Novi is a picturesque coastal town in Montenegro, offering a range of activities for tourists to enjoy. Here are some of the top things to do:

● Explore the Old Town

● Visit the Kanli Kula fortress,

● Take a boat tour of the Bay of Kotor

● Relax on beautiful beaches, such as Žanjic Beach or Mirišta Beach

● Visit the Savina Monastery

● Attend the Mimosa Festival in February

● Visit Potronovi

An Overview of the Real estate market in Herceg Novi

When we look at real estate prices in Herceg Novi according to the chart shown above, it is clear that this is the area with the lowest prices in the coastal part of Montenegro and indeed the lowest price per m2 versus neighbouring Croatia.

Looking back to lessons learned in Tivat, as regards price growth as a result of the emergence and expansion of Porto Montenegro and Lustica Bay, we project that the up-and-running world-class resort of Portonovi, adjacent to Herceg Novi, will have a similar effect on prices in years to come in his local area also. Portonovi, which is a fully functional mixed-use resort including the 1st One&Only hotel in Europe, has already invested around EUR 1 billion.

This prime resort, where prices start at EUR530,000 for a studio apartment and rising to EUR10m as the entry price for a One&Only Portonovi Private Home.

Portonovi – Source: Shutterstock
 One&Only Portonovi Private Home

The Marina neighborhood already offers a wide selection of restaurants and boutiques.  We predict that Portonovi will have the same effect on the area in which it is located as Porto Montenegro and Lustica Bay have had on Tivat. Can you believe that right now you can buy an apartment in the immediate vicinity of Portonovi for approximately EUR120,000.

With such value, a net rental return is possible of above 5% for properties within walking distance to the first One&Only hotel in Europe and the Portonovi resort, which is open to all visitors, and open all year around with a full calendar of events.  

That concludes our blog on the Top 3 destinations for investing in real estate in Montenegro for Summer 2023. Interested to read more? – You can read our simple buying guide here and read more about Montenegro and the region the latest edition of The Collection magazine here and for any further information, contact us on