Montenegro Property News

Russian Interest in Montenegrin Real Estate Spikes Despite Sanctions

Russian Interest in Montenegrin Real Estate Spikes Despite Sanctions

Central Bank on Thursday said Russians are once again the largest real estate buyers in the country – despite the Montenegrin government's support for Western sanctions on the Kremlin.

The Central Bank of Montenegro, CBCG, said on Thursday that Russians are the largest real estate buyers in the country, after they bought 20 million euros’ worth of property since February.

The Central Bank said that Russians were also the largest investors in Montenegro, after they invested 41.6 million euros in the country since the beginning of the Russian invasion of Ukraine in February.

“Russian investments involved investments in companies in Montenegro or their purchase, the purchase of real estate and so-called inter-company debt, in other words, companies from Montenegro borrowing money from companies from Russia. According to official data, the majority of investment was in buying real estate in Montenegro,” the bank told the daily Pobjeda.

Maja Radunovic, a real estate agent from Podgorica, said Russian interest in property in Montenegro had increased after the beginning of the Russian invasion of Ukraine. She said Russian buyers are mostly interested in villas and apartments on the Adriatic coast.

“Most of the Russians are buying or renting real estate in the coastal towns of Bar, Herceg Novi, Petrovac and Budva. These coastal towns were popular among Russians in previous years, and there are also Russian communities in those towns,” Radunovic told BIRN.

“If the war in Ukraine and Western restrictions on Russia continue, we could expect interest in buying property in Montenegro to increase even more,” she added.

With 40.6 million euros invested since February, the United Arab Emirates was the second biggest foreign investor. According to the Central Bank, 10.3 million euros was invested in Montenegrin companies, 29.4 through loans from Italian companies, while the remaining 798,000 went on the purchase of real estate.

The fourth-largest investor in Montenegro was Turkey, with 27.9 million euros, mostly invested in Montenegrin companies; 8.3 million was invested in real estate.

For years, Montenegro has been called the “Russian VIP resort” – the preferred destination of Russian oligarchs. According to some surveys, more than 40 per cent of real estate in Montenegro belongs to Russians, including some former politicians and billionaires.

Montenegrin ties to Russia date back to the reign of Tsar Peter the Great who agreed to take the small Orthodox principality under Russia’s protective wing.

The warmth cooled in 2014 after Montenegro backed US and EU sanctions on Moscow for its intervention in Ukraine and unilateral annexation of Crimea.

Ties deteriorated further after Montenegro accused Russia of sponsoring a coup attempt in 2016 allegedly aimed at overthrowing the pro-Western government and stopping the country from joining NATO. It joined the alliance in June 2017.

On March 7, Russia added Montenegro to a list of enemy states, accused of actions against the Kremlin, while on April 8 Montenegro joined EU sanctions on Russia over the war in Ukraine.

Source: BalkanInsight

Published: July 11, 2022