Real Estate in Montenegro

By Mary Mullaj

It’s refreshing to hear about a part of the global economy that is doing well these days. One of these pockets of success is the real estate market in Montenegro, which is still going strong thanks to an influx of Russians to the area. As a fashionable alternative to the south of France, Turkey, or Spain, Montenegro has earned the nickname Moscow-on-the-Sea as Russians buy up coastal real estate.

Russians feel a cultural connection with Montenegro and Serbia because of their common Slavic-Orthodox identity, and feel welcomed and at ease. Russians accounted for 12 percent of all tourists to the country last year, and they are buying up luxury real estate faster than it can be built. Condominiums by the Mirax Group are selling for $10,400 per square foot, and the company can barely keep up with demand. Russian executives of companies like Gaxprom and VTB pay upfront and with cash for the home.  What’s more, land is now more expensive in Montenegro than it is in Monaco. All the development has created a new class of millionaires in Montenegro.

Russian investment in the country has grown to $13 billion, a figure that could be on the conservative side considering that Russians often invest through a third country or by teaming up with Montenegrins. Russians have also invested heavily in the country’s industrial sector as well as in Serbia’s gas company. Even though foreigners own only 1 percent of Montenegro, the level of Russian investment in the western Balkans brings up questions of geopolitical motives. Even so, one has to admire such a small country’s success in drawing such attention and investment from wealthy foreigners.

via the new york times
http://www.nytimes.com/2008/11/01/world/europe/01balkans.html