International Real Estate: House Hunting in … Montenegro
A Stone Villa in the Mountains of Montenegro
$3.5 MILLION (3.1 MILLION EUROS)
This four-bedroom stone house is in Dobrota, a small town just outside the historic center of Kotor, one of Montenegro’s most popular tourist destinations. It is part of a waterfront stretch of homes and small restaurants on the shore of Kotor Bay, a submerged river canyon at the foot of Mount Lovcen’s limestone cliffs.
In addition to the four-level main house, built in the early 1800s, the property includes three one-bedroom apartments, each with its own kitchen and bathroom. During high season in the summer, the house and the apartments rent for 1,000 euros ($1,120) a day, usually for events and wedding parties, said Ivana Vukicevic, head of the property portfolio at Montenegro Prospects, which is marketing the home.
The property has a total of 3,553 square feet, including a garage with a wide terrace on the roof. A public boat dock in front of the house, across a small road, has a deck on the waterfront.
The first recorded reference to the villa is in 1808, Ms. Vukicevic said. It was abandoned from 1941 to 1996, when the current owner bought and renovated it, adding an extension on the back of the house. Two of the one-bedroom apartments, which have separate entrances, are part of the extension; the third apartment is in the attic of the main house.
The house is entered through a gated courtyard, surrounded by a stone wall. The ground floor has a living room with a fireplace, a modern eat-in kitchen, a laundry room and a bathroom. The kitchen has granite countertops and custom cabinets, as well as a door leading out to an ivy-covered patio with a sink and a barbecue.
Stone stairs lead to the second floor, where there is another living room with a dining area, a fireplace and access to a balcony overlooking Kotor Bay and the Orjen mountains. Some of the furniture is included in the asking price, but the owner is keeping several of the antique pieces, Ms. Vukicevic said.
The third floor has four bedrooms and two bathrooms. The two larger bedrooms offer panoramic views of the bay. The master bedroom has an en suite bathroom, while the other bedrooms share a bathroom.
Of the two apartments in the extension, one has a small kitchen, living room, bathroom and bedroom. The other is a duplex with a living room, bathroom and kitchen on the third level and a bedroom on the fourth level.
The house is about three miles from the medieval fortress town of Kotor, a Unesco World Heritage site known for its narrow, winding streets, old churches and ancient walls stretching into the hills. The town, with a population of about 14,000, has a thriving night life of clubs and restaurants, as well as a famously large population of cats that wander the streets.
The mountainous Lovcen National Park, with peaks reaching more than a mile in altitude, is about an hour west by car. The nearest international airport is in Tivat, about 15 minutes from the house. Podgorica, the capital and largest city in Montenegro, is served by Podgorica Airport, about a 90-minute drive to the east.
Home sales and prices have been rising in recent years, due mostly to an increasing number of international buyers, agents said. The foreign interest was sparked by Montenegro’s entry into the North Atlantic Treaty Organization in 2017, a growing number of direct flights and the use of the euro as the country’s primary currency. (The nation, which declared its independence from the State Union of Serbia and Montenegro in 2006, is in the process of joining the European Union.)
Also, new developments with construction and amenities “based on European standard expectations” have been drawing more buyers, said Leila Calic, director of Resido Montenegro, a real estate agency and consultancy. “The market is more and more offering luxury properties, and at prices still attractive in comparison with the French coast, for example, or even Spain seaside locations,” Ms. Calic said.
But expansion has come at a cost: In 2017, fearing the environmental impact of excessive development and increased tourism, Unesco pressured the Montenegro government to impose a temporary moratorium on new construction in the Kotor Bay area. The ensuing slowdown has caused prices to rise as much as 20 to 25 percent, said Daniela Cecavac, an agent with Re/Max Montenegro.
The market is dominated by second-home buyers, she added, “who just fall in love with the place.”
Other buyers are seeking investment property they can rent during the year, said Kieran Kelleher, managing director of Dream Estates Montenegro, a Savills affiliate. Sales of “prime” properties at the high end of the market have increased by about 10 percent in the last year, Mr. Kelleher said, “on the back of strong demand and continued interest from a broad range of investor nationalities.”
There is no official national data on sales and pricing, and the market can be confusing for buyers, agents said. “You can have two developments next door to each other, and one is double the price,” said Mark Wilde, director of Montenegro Real Estate.
Who Buys in Montenegro
International buyers account for 80 to 90 percent of sales in Montenegro, agents said. Russian buyers once dominated the market, but sales to Russians have “slowed to a virtual stop” in the wake of government sanctions instituted after Russia’s annexation of Crimea in 2014 and the continued turmoil, Mr. Wilde said.
Since then, more Turkish buyers have entered the market, agents said. Mr. Kelleher said that 35 percent of his clients are from the Middle East and Turkey. Buyers from the Commonwealth of Independent States and Russia are still part of his clientele, he said, but now represent only about 15 percent of sales.
On Kotor Bay, where tourists flock in cruise ships, there has been a “significant increase” in British buyers in recent years, Ms. Cecavac said, as well as more buyers from Germany and France.
Buying a home in Montenegro is “a simple and fast process,” Ms. Cecavac said. There are no restrictions on foreign buyers, except when it comes to agricultural land.
A notary handles the documents and details of the sale, but agents recommended hiring a lawyer to oversee the transaction. “Although a public notary system is in place, we would still recommend the services of a qualified lawyer to check the property and title and to manage the process,” Mr. Kelleher said.
After the contracts are signed and notarized, and payments made, it normally takes 10 to 15 days for the land registry to issue the title deed, Ms. Cecavac said.
Montenegro government: gov.me
Kotor Unesco site: whc.unesco.org
Montenegro travel: visit-montenegro.com
Languages and Currency
Montenegrin, Serbian, Bosnian, Albanian, Croatian; euro (1 euro = $1.12)
Taxes and Fees
There is a 3 percent transfer tax on the purchase of resale properties. Additional costs, including fees paid to a lawyer and a notary, might add another 1 percent to the sale price, Mr. Kelleher said.
The annual tax on this property is about 500 euros ($560) a year, Ms. Vukicevic said.
Ivana Vukicevic, Montenegro Prospects, 011-382-32-322-489; montenegroprospects.com
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Published at Wed, 03 Apr 2019 13:31:18 +0000