Real estate markets in BiH and Montenegro face regulatory and economic shifts

Real estate markets in Bosnia and Herzegovina and Montenegro are undergoing significant shifts driven by regulatory changes and economic pressures. In Montenegro, the introduction of new visa requirements for citizens of Russia, Turkey, Belarus, China, and Saudi Arabia is expected to impact the coastal market, which has historically relied on foreign investment. Experts note signs of stagnation in coastal areas like Budva and Kotor, with some older property prices dropping by 15 to 20 percent.

In Bosnia and Herzegovina, the housing market faces a complex landscape. While new construction is active in cities like Sarajevo, Banja Luka, and Mostar, experts predict a steady annual price increase of 3 to 7 percent due to high demand and international trends. However, accessibility remains a challenge; in Sarajevo, a significant portion of the housing stock is tied up in the informal economy or used for short-term rentals, creating a ‘leaky bucket’ effect for long-term residents.

Broader economic factors, including inflation and rising living costs, continue to squeeze citizens. In Bosnia and Herzegovina, although nominal wages have risen significantly since 2020, inflation has eroded more than half of these gains, reducing actual purchasing power. Experts emphasize the need for structural reforms in agriculture and industry to combat import-driven inflation and improve economic competitiveness.