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Off-plan developments in Kotor Bay
With property prices soaring in neighbouring Croatia and particularly Dubrovnik many investors are looking to buy further south in Montenegro. Those visiting the country for the first time are vowed by magnificent scenery - waterfront towns sandwiched between the Adriatic and Dinaric Alps, UNESCO-protected national parks teeming with birdlife, huge lakes full of fish, the world's second deepest canyon, and the secluded beaches which were once the playground of the rich and famous, and which are set to benefit hugely once more from the increase in visitors.
Even before the country gained its independence last summer, real estate agencies were sprouting up all over the place to satisfy the growing demand for property, apartments and houses. Most buyers come from Russia, the UK and Ireland. Prices have also been rocketing and are now too high for the local population.
And rich and famous are buying too. Peter Munk, a Canadian entrepreneur, signed a contract last year to redevelop the 24-hectare Arsenal repair yard on the scenic Kotor Bay as a luxury yacht marina with 724 berths, the largest in the eastern Mediterranean. Also, the news hit the front pages of the Montenegro's media in March that US real estate tycoon Donald Trump is planning to invest in Montenegro and build hotel complexes near the coastal town of Ulcinj.
The majority of foreign investors are buying in the Kotor Bay region, with the remainder choosing along the Adriatic coast which includes tourist hotspots such as Sveti Stefan and Budva.
Unsurprisingly an increasing number of foreign investors are seeking property within the walls of the old town of Kotor, the picture postcard perfect town located deep in the Bay. Its UNSECO World Heritage Listed Old Town is a treasure trove of Venetian and Renaissance era architecture, a labyrinth of alleys and side streets with first-rate restaurants and buzzing bars.
But traditional stone buildings in good condition, the kind most buyers want, are in short supply. Stone ruins on hillsides overlooking the Kotor Bay still can be bought for as little as £30,000, but modernization is expensive and difficult. There is, unsurprisingly, little room for off-plan developments in Kotor itself, however a number of new developments are springing up along the Kotor Bay.
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New developments include Boka Heights,
a 30 luxury apartment complex just 300m from the seafront of Dobrota, west of Kotor.
The development features one and two bedroom properties. Once they are completed the apartments will boast dramatic sea views, private balconies or patios, access to a communal swimming pool and allocated parking spaces. Pre-release prices for the Boka Heights apartments start at £100,770 and are offered for sale through
Emerging Real Estate.
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For many investors new builds are well worth consideration for a number of reasons. The opportunity to pay in instalments is very attractive because it means that they do not need to find all the money to finance their purchase upfront. In terms of resale value, buying into an off-plan development means that you are effectively purchasing a property at well below its market price, due to the appreciation in value that occurs during the construction period, which is typically one year. The other benefit, particularly relevant to absentee owners, is the fact that the property is a brand new and that it doesn't need any work done.
Finance is of course a key factor when choosing what size of property to invest in. At present foreign investors cannot get a mortgage in Montenegro and no UK bank will lend money against a Montenegrin property. Therefore the buyer is required to pay each instalment of the off-plan purchase in full, with private funds. This is usually done by releasing the equity from the buyers' own home, or an existing property portfolio. However, some limited mortgages under certain conditions could be available soon. Also, the mortgage situation in Montenegro is expected to change as the country starts its progression towards membership into the European Union.
Payment for off-plan purchases is typically broken down into four stages: the deposit (typically 10%), a further 30% upon signing the sales contract, another 40% when the basic structure has been completed, with the final 20% payable upon completion.
Anyone buying new or off-plan properties is subject to the same legal process as other investors. At present this means that you can establish a Montenegrin company to make the purchase, or buy as an individual. Registering a Montenegrin company only takes a few days.
With the majority of British buyers who are investing in Montenegro planning to be absentee landlords, one of the most important considerations is the rental potential of off-plan properties. During the peak holiday season it is difficult to find vacant holiday properties and experts estimate the annual gross yield of rental properties to be between 6-8%.
Another important consideration for potential investors is how to let their property. Some off-plan developments come complete with a rental management plan, which can increase rental yields. Also, purchasing an apartment with a private pool and reservations assistance can also greatly increase the rental potential and of course positively influence the resale value.
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Olive Hill Villas is the first luxury development in Herceg Novi area, in a small fishing village of Djenovici.
Surrounded by lush vegetation with orange, tangerine and olive plantations, and nearby beaches, Djenovici offers a perfect setting for the property.
Olive Hill Villas development will include only sixteen apartments constructed to highest standards and offering stunning views of the Kotor Bay from each unit.
Each apartment is fully fitted and ready for use.
Furthermore, buyers get the chance to have an interior designer on their disposal to help them choose the best looks of their apartment.
For information on prices and availability contact developer,
Adria Developments.
They have also arranged rental management through
Datum Montenegro.
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| The Development “Le Domaine du Fjord”, due for completion in 2008, is a unique and prestigious estate including only six apartments built to the highest specification.
The site is situated in Prcanj, one of the most beautiful traditional and picturesque stone villages along the shore of the Kotor Bay.
Each apartment will be composed with two bedrooms, one to two bathrooms and an open plan living room opening onto spacious terraces.
Additional features include infinity pool, parking space, air-conditioning throughout and quality tiled and parquet floors.
The apartment interiors are designed in a contemporary style with large windows allowing streams of daylights flow in while providing a wonderful view of the sea.
The apartment building will be set in a landscaped garden planted with typical Mediterranean plants and trees and within 400 meters of all tourism facilities.
Developers will also offer and provide owners with additional services (not included in the selling price) such as fully fitted kitchen with appliances and furnishing package.
Assistance with key-holding and rental changeovers can be provided to owners wishing to rent their apartments.
Maintenance of common areas will be arranged, at least for the first year by the developer
Size of apartments is between 64sqm and 66sqm (excluding terraces) and priced at £1,700 per square meter. In accordance with the current market price, this gives buyer a 20% off plan discount on average.
The apartments are on sale through Artedo Developments, tel. +33 (0)6 14 39 41 44, or e-mail
contact@domainedufjord.com.
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