Putin's decree and Russian property in Montenegro

According to a decree from Russian President Vladimir Putin, local politicians are required to close their accounts in foreign banks and sell property located outside of Russia by June 1st. Since 2008, hundreds of millions of euros in Russian capital have been invested in Montenegro, raising questions about how Putin's decree will affect the withdrawal of Russian investments or changes in the real estate market in Montenegro. Although significant changes are not anticipated in Montenegro, analysts still believe that fluctuations in the situation are possible.

Throughout the Montenegrin coast, you can see billboards in Russian, primarily featuring offers for the sale of luxury real estate. The main buyers are wealthy Russians who have already invested hundreds of millions of euros in villas, apartments, and commercial properties in Montenegro. As reported by Al Jazeera correspondent Milica Marinović, according to the Real Estate Administration, about a quarter of all properties in Budva are owned by foreigners. However, there is no reliable information on how many of them are owned by Russians.“It’s unclear whether Russian capital will start leaving Montenegro due to Putin’s decree.

Ana Nives Radović, an economic analyst, claims that it is not exactly known how many Russian officials own property in Montenegro.“As citizens and observers, we know that there are quite a few Russians here, especially in Budva, but we cannot say how many of them are officials and how many are owners who are forced to sell their assets.”- she says.

Real estateagency representatives claim that there has been no increase in the sales of properties owned by Russians in recent months.“We do not have a heightened interest in such transactions; on the contrary, there is an active interest in purchasing land plots, which implies more significant investments.”— comments Nadia Bozheva from the real estateagency Galeo.

As for the authorities in Montenegro, they are not concerned that Putin's decree will lead to a capital outflow from the region.“I am not worried that any investor will leave because of Montenegro's mistakes. We are trying to create more attractive conditions for doing business, and we would like Russian and other investors to continue investing here and helping to develop our projects. I hope that will be the case.”— emphasizes the Prime Minister of Montenegro, Milo Djukanovic.

Nevertheless, experts believe that one of the possible consequences of the decree could be the destabilization of the real estate market in Montenegro.“If it turns out that a significant number of Russians who own real estate in Montenegro are forced to sell, and if they are compelled to do so in a short period of time, they will likely offer their properties at lower prices than what they paid. This will lead to an oversupply of discounted offers and, as a result, may disrupt the stability of the real estate market.”— Radovich believes.

Unlike Croatia, where there were restrictions on the sale of property to foreigners until 2009, Montenegro had no such limitations. This allowed foreign investors to significantly develop the Montenegrin coastline over the years.