Why Montenegro is the hottest new luxury property spot

The Adriatic country is booming thanks to a spate of developments. For buyers who want both value and glamour, it is the ideal alternative to destinations like the French Riviera and Italy


Cathy Hawker

For Montenegro, it has always been life in the fast lane. Since becoming an independent state in 2006, it has been the quickest-growing tourism economy to 2019, with visitor numbers growing from 953,000 to 2.6 million. The beauty of the Adriatic coast, new five-star hotels, luxury shopping experiences and restaurants are only part of the reason that tourists return each year; but with new developments taking place, soon they won’t have to leave.

The main prize for tourist arrivals is Boka Bay, Montenegro’s broodingly beautiful inlet from the Adriatic sea. The waterfront is lined with elegant yachts, speedboats and cruise ships, of which 500 visit each year, filled with tourists eager to visit the town of Kotor, a Unesco world heritage site. But the bay holds another reason for the region’s growing international reputation — its three large-scale marina residential developments: Porto Montenegro, Lustica Bay and Portonovi.

Boka Bay is known for its idyllic waterfront

Boka Bay is known for its idyllic waterfront

The three are in various stages of development but all have residents and five-star hotels from global brands. They form an upmarket trinity of handsome new homes with sports and leisure facilities, retail and restaurants, each with its own character, says Kieran Kelleher of Savills associates, Dream Estates Montenegro.

“Porto Montenegro, the first and most established resort, has glamour and luxury, a place to see and be seen with high-end shopping and overall a younger audience,” Kelleher says. “Lustica Bay is a place to live full-time, the largest of the three covering 690 hectares, while Portonovi offers large properties including the One & Only villas selling for over €10 million (about £8.63 million). The three are not in direct competition and together add up to more than the sum of their parts, putting Boka Bay firmly on the map.”

James and Laurie Wates, both 64, bought an apartment in Porto Montenegro in 2010

James and Laurie Wates, both 64, bought an apartment in Porto Montenegro in 2010

Laurie Wates and her husband, James, both 64 from Surrey, were early adopters, buying a two-bedroom apartment at Porto Montenegro in 2010. As boat owners with a berth in Poole, Dorset, and two sons then aged 13 and 10, they were looking for a warmer base to enjoy time afloat.

“We looked at Spain and the south of France but everywhere seemed more crowded and the water quality was often not as clear,” Laurie says. “We were up for an adventure and had heard about Kotor Bay so went to explore. It was exciting, a new frontier. Watching the resort evolve has been interesting, and we like living close to Tivat old town where we have friends.”

Fourteen years on, James is admiral of the Porto Montenegro Yacht Club and the couple and their adult sons visit regularly for summer holidays.

“The start of easyJet flights into Tivat was transformational for us, making a long weekend perfectly possible,” Laurie says. “We’ve met such fun people over the years, friends for life. We spend days on the water, boating, paddleboarding, swimming, sailing. We’ve explored some of the islands of Croatia and down to the Albanian coast.”

• Why Montenegro’s Kotor Bay is the underrated jewel of the Mediterranean

In all three Boka Bay resorts, property prices have never fallen, Kelleher says, even during Covid, and all three have seen strong sales with demand considerably outweighing supply.

Porto Montenegro, owned by the Dubai sovereign wealth fund since 2016, opened in 2009 and leads the pack for pricing with an average price per square metre from about €10,000, compared with €9,000 in Portonovi and €7,000 in Lustica Bay.

One to three-bedroom apartments in Marina Village at Lustica Bay start from €508,000

One to three-bedroom apartments in Marina Village at Lustica Bay start from €508,000

That pricing will be beaten by the latest neighbourhood to launch at Porto Montenegro, Synchro Yards, with homes in two new buildings for sale reaching €23,000 a square metre. Aeris homes, built on the water, will have top prices (22 one to four-bedroom apartments cost from €1.89 million) while 25 homes at Ivo Residences managed by the new Kerzner Hotel brand Rare Finds start from €1 million for a one-bedroom flat.

“Synchro Yards is a new district at Porto Montenegro that focuses on creative and artistic development, with music, theatre, ballet, recording and video studios, what I call a spa for the mind,” says David Margason, managing director at the resort. “Boating has always been a priority here. We’re an award-winning modern marina and our owners are passionate about the natural environment of Boka Bay, but they are also culturally curious.”

Lustica Bay is four times larger than Monaco and fronts both the Adriatic sea and Boka Bay. By 2026, it aims to open Montenegro’s first 18-hole golf course, designed by Gary Player. Over the next 20 years, the resort plans will become home to 6,000 residents, in 3,000 apartments, 300 villas and 7 hotels, with only 10 per cent of the land developed. Prices for homes start from €508,000 for one to three-bedroom apartments in Marina Village and from €933,000 for apartments, townhouses and villas in the latest development, the Peaks.

Apartments at Portonovi are priced from €650,000, while villas range from €2.7 million

Apartments at Portonovi are priced from €650,000, while villas range from €2.7 million

Portonovi, close to Herceg Novi, is the newest of the three with generously sized homes sitting around a 238-berth marina and Europe’s first One & Only hotel. Prices start from €650,000 for apartments with villas from €2.7 million.

“This new price point at Porto Montenegro is a big moment for the country, taking it into competition with major Mediterranean resorts,” Kelleher says. “Overall, buyer profiles in the three resorts have changed from being pure investors to those who want to use and enjoy the homes themselves, while also getting a rental return that covers costs and hoping for moderate medium to long-term capital growth.”

Need to know

• Montenegro ended its Citizens Investment Programme in December 2022. Property owners can apply for a one-year residence permit and, after five years, permanent residency
• Income tax and corporate tax are capped at 15 per cent regardless of income
• Real Estate Transfer Tax for resale properties, was increased in 2023 from a flat 3 per cent to a sliding scale of 3 to 6 per cent.

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