The Association of Tenants of Montenegro (UPCG) points out that this decline does not mean that rents have become low, but rather that there has been a partial correction after a period of rapid growth, and that even today a significant portion of citizens' income (up to around 40 percent) goes to paying for rented housing.
As Stefan Mišković, the owner of the Podgorica-based agency "Multitask nekretnine", told "Dan", when it comes to the rental market in Podgorica, over the past year there has been a stabilization and slight decrease in rental prices compared to the period of high demand that followed the arrival of foreign citizens, primarily from Russia and Ukraine.
– Compared to the beginning of last year, there is a clear drop in rents, on average around 15–20 percent. For example, one-bedroom apartments that were rented for an average of around 500 euros a year ago are now most often rented for around 400–450 euros, while some apartments can be found for around 350 euros, which was not typical for the previous period – stressed Mišković.
He believes that reduced demand from foreign citizens is the main factor that has caused the decline in rents.
– After the initial wave of arrivals of Russian and Ukrainian citizens, who significantly raised rental prices, their presence on the market decreased. At one point, part of the demand was replaced by Turkish citizens, but this trend did not last long. In addition, after certain events at the end of last year, a larger number of previously occupied apartments appeared on the market, which increased the supply and further influenced the decline in prices. Currently, demand from foreign citizens is significantly lower, while the market is dominated by domestic tenants – said Mišković.
He added that the purchasing power of the domestic population is significantly lower compared to foreign tenants, which, he explains, is one of the key reasons why rental prices are now gradually returning to a level that is more realistic compared to the standard of living in Montenegro.
When it comes to coastal cities, Mirko Vujović from the Budva-based real estate agency "Adria Stone" tells "Dan" that, compared to the beginning of last year, there has been a clear drop in rental prices in this region, estimated at around 20 percent. He also agrees that the sudden departure of foreign citizens, primarily Turkish ones, is the main reason for this trend, as it has also led to a significant increase in the supply of apartments for rent on the market.
Most sought-after smaller apartments
Mišković says that in Podgorica, studios can currently be rented for 300 to 350 euros (more for better locations and amenities), and one-bedroom apartments for 350 to 550 euros. Two-bedroom apartments on the market range from 550 to 800 euros in monthly rent, and three-bedroom apartments from 700 euros and up.
Mišković notes that house rents vary significantly depending on location and square footage, but even there, slight price corrections have been recorded.
– Of course, more luxurious properties in newer and prestigious buildings still achieve higher prices than average – adds Mišković.
According to him, smaller apartments – studios and one-bedroom apartments – are still the most sought-after, due to their accessibility and wider target group of tenants.
– The increased supply in a short period of time directly influenced the downward correction of rental prices. It is important to note that, unlike the rental market, real estate prices for sale remain stable and are at last year's level – Vujović told "Dan".
As he added, monthly rents in coastal cities currently range depending on the type and equipment of the property.
– Studio apartments are most often rented out in the range of 250 to 350 euros per month. One-bedroom apartments reach prices of around 500 to 600 euros, while two-bedroom apartments are rented out in the range of 700 to 850 euros. When it comes to luxuriously furnished houses, rents reach several thousand euros per month, depending on the location and level of equipment. According to our experience at the agency, the greatest demand is currently for two-bedroom apartments, which represent the optimal price-to-functionality ratio for the largest number of tenants – said Vujović.
The president of the Montenegrin Tenants' Association, Dragan Živković, also notes a correction in rents in Podgorica, while on the coast, according to him, prices are still strongly influenced by seasonality. Živković points out that in the north of Montenegro, rents are significantly lower and range from approximately 200 to 400 euros, with lower supply and weaker demand, which is why there are no pronounced oscillations.
– This drop of 10–20 percent does not mean that rents have become low, but that there has been a partial correction after a period of rapid growth, when prices in some cities increased by over 50 percent in a relatively short period of time. Despite the slight stabilization of prices, the position of tenants has not improved significantly – on the contrary, in many aspects it is more difficult than before. Today, it is characteristic that a large part of income goes to rent (often 40 percent or more), the market is still legally uncertain, with a large number of informal contracts, tenants are exposed to frequent changes in lease terms and short notice periods. The problem of seasonal emigration due to tourist demand is particularly pronounced on the Coast – Živković told “Dan”.
Živković estimates that the rental market in Montenegro is currently in a phase of mild correction after rapid growth, but that rents are still high compared to the standard of living of citizens.
