Visit-Montenegro.com : Euro 350 Million Worth of Real-Estate Sold in Budva this Year

Budva – Although there seems to be a halt in the feverish real-estate trading in Montenegrin tourism metropolis over the last couple of months, while local agents face lack of business, official statistics on the real estate tax incomes suggest that Budva still remains a popular place for this type of business.

According to these figures, during the first seven months of 2008, value of sold properties came up to Euro 350 Million. With such results, as “Vijesti” have been told in the Municipality, this year’s plan has almost been met already in July.

Bearing in mind that the fall might bring another round of hectic trading at the real-estate market at Budva’s Riviera, Municipality officials anticipate that the value of sold property might reach around half a billion Euros by the end of the year. Such result would repeat the figures from 2007, which, according to most estimates, were unlikely to happen once more.

Municipal Secretary for Trade and Finances, Mihailo Djurovic told “Vijesti” that around Euro 3,5 Million had been paid to the Municipality in form of the real-estate sale tax so far.

“We have planned that four million Euro would be paid in this tax during this year. This projected amount would, most certainly, be exceeded by estimated Euro 1,5 Million”, Djurovic announces.

Judging by the municipal data about the status of its’ budget, euphoria about the real-estate at Budva’s Riviera has not reached its’ climax yet.

Although many find that everything has already been sold in Budva, those well-acquainted with the situation say that the most attractive locations have still not been sold and that a lively fall at this market might well occur. As evidence to this claim, some 40 new buildings with around 2,000 flats are expected to be ready for the market this fall.

Enormous amounts collected from taxes support speculation that the real-estate market at Budva’s Riviera has been entirely taken over by the Russians, who are dictating the prices by taking over entire business of trading with their fellow-countrymen.

Owner of one of Budva’s most famous real-estate agencies has told “Vijesti” that he has not sold a single piece of property to a Russian citizen since New Years.

Director of “Mirax Balkans”, Vjeceslav Leibman has stirred public discussion recently, with his statement that the situation at the real-estate market was worsening.

Leibman commented prices of land and warned that the prices were simply too high.

“I anticipate a serious crisis at Montenegro’s land-market in October and November. Those who would want to sell land should, in my opinion, join forces with investors, in business where they would be the ones providing land while investors would contribute with money and the project.

I think that the price of land is going to drop and that the return to the old prices would not occur too quickly”, Leibman said.

He added that there was a huge demand at the real-estate market and advised that all those who can should build.

“I say this from my own experience. When it comes to purchase of finalized real-estate, there is a huge interest in Russia. There is demand for some 300,000 to 400,000 square meters of real-estate, belonging to the class of Euro 3,500 to Euro 4,000 per square meter”, Leibman said.

Real-estate market at Budva’s Riviera experienced boom with the arrival of foreigners, especially Russians, so that the prices multiplied several times over.

Square meter of a flat in Budva, thus, reached the price ranging from Euro 3,500 to Euro 7,000 per square meter in the Old Town.

Prices of houses and flats in the elite zones of Sveti Stefan and Milocer have been particularly attractive, where foreigners, in certain instances, paid up to Euro 10,000 per a square meter.

Market in Kotor Experiences a Drop

Unlike Budva, real-estate market in Kotor practically came to a halt.

Although the estimated value of real-estate sold in Kotor during the last year is Euro 230 Million, which brought this town the position of the real-estate leader in the Bay, data which can be obtained from the local authorities suggest that there was a notable drop in selling during the first six months of 2008, with only Euro 48 Million in property sold.

Economic advisor with Kotor’s Municipality, Ivo Magud says that this was to be expected and that projections that this Municipality would earn estimated Euro 600,000 from the real-estate sale tax are becoming a reality.

“Real-estate trade has dropped due to the high prices of the real-estate, but also due to the fact that the law regulating ownership and registering of land-property in the cadastre for the foreigners has not been adopted”, Magud noted.

(12 August 2008)

By: V.LAJOVIĆ-I.K.