Putin's decree and Russian property in Montenegro

By decree of Russian President Vladimir Putin, mandatory measures are being introduced for local politicians regarding the closure of accounts in foreign banks and the sale of assets outside the country by June 1st. Since 2008, Russian investments in Montenegro have reached hundreds of millions of euros, raising the question of whether Putin's decree will affect the outflow of Russian capital or changes in the real estate market in Montenegro. Although significant capital movements are not expected in Montenegro, analysts are expressing opinions about possible changes.

Russian billboards advertising luxury real estate have become a familiar part of the landscape along the Montenegrin coast. The main buyers are wealthy Russians who have invested significant amounts in villas and apartments. According to Al Jazeera correspondent Milana Marinović, the Real Estate Administration reports that about 25% of all properties in Budva are owned by foreigners.

Economic analyst Ana Nives Radović claims that there is no clear information on the number of Russians who own property in Montenegro.“We understand that there are indeed a lot of Russians here, especially in Budva, but we don’t know how many of them are connected to government structures and how much property they control.”“She noted. According to representatives of real estate agencies, the last few months have not shown an increase in sales of properties owned by Russians.”“The demand for our services has decreased, while interest in purchasing plots has slightly increased; these are larger investments.”, - reports Nadya Bozhevich from the Galeo agency.

The Montenegrin government is not concerned that Putin's decree will lead to capital outflow.“We are striving to create the best conditions for investors and would be happy if Russians and other foreign investors stay and continue to invest, helping us implement our projects.”“,” said the Prime Minister of Montenegro, Milo Djukanovic.

However, economists warn about the possibility of destabilization in the real estate market in Montenegro.“If it turns out that many Russians who own real estate find themselves in a situation where they need to sell their properties quickly, they may offer them at a price lower than what they paid. This could lead to an oversupply in the market and a decrease in property values.”", - explains Radovich.

Unlike Croatia, where the sale of real estate to foreigners was prohibited until 2009, Montenegro had no such restrictions. This contributed to a significant portion of the coastline ending up in the hands of foreign investors.