INTERNATIONAL REAL ESTATE

Along the Balkan nation’s Adriatic coastline, sales are spiking and prices are returning to 2019 levels, with demand outpacing construction.

A 19th-Century Stone Villa on Montenegro’s Coast

$1.8 MILLION (1.5 MILLION EUROS)

This semidetached, four-bedroom stone villa is in Lepetane, a coastal village just north of the town of Tivat, in southwest Montenegro.

The 2,443-square-foot villa, built in 1820 and renovated five years ago, sits across a local road from the Bay of Kotor, a mountain-ringed tourist haven that spills into the Adriatic Sea. Its “cocoon” design within a historical facade blends traditional Montenegrin construction with contemporary architecture and modern interior design solutions, said Boris Darmanovic, the brokerage manager at Montenegro Sotheby’s International Realty, which has the listing.

The architect “brought an unexpected amount of light into the house,” Mr. Darmanovic said, using metal bridges to link sliding glass doors in the second-floor bedrooms to the exterior walls. “It’s not typical for these houses.”

Entry is through an arched wood double door in a stone wall encircling a stone-tiled, ground-level courtyard to the left side of the house.

The front door, up a flight of stairs, opens to a great room with classic Montenegrin stone walls and a tiled floor. A curved floating leatherette sectional faces a fireplace with a television mounted above. At one end is a dining table illuminated by twin drum-shade chandeliers. The home is being sold furnished.

Left from the front door, an archway leads to the kitchen, which has stone walls and a stone barrel ceiling. An island is fitted with a white marble countertop, a sink and a cooktop. Along a cabinet wall is a refrigerator, oven and camouflaged powder room. A back door opens to a spacious terrace with a summer kitchen including a barbecue.

From the kitchen, a spiral staircase descends to the ground-level spa. A heated indoor pool has a ceramic tile lining and white marble coping. Across the tile floor are a sauna, a Turkish steam room and a bathroom with a shower. Double doors at the front of the pool room open to a walled open-air terrace near the road.

A study on the ground floor can be used as a bedroom and opens to a courtyard with an antique stone basin and a storage nook for firewood. A one-bedroom, one-bath apartment for guests or staff has a separate entrance.

The second floor’s broad hall has a door to a side terrace. Sliding shades, mounted under solar panels for hot water, shield the porch. Two bedrooms, each with an oak floor and sliding glass door, share a hall bath. A four-foot exterior bridge links the bedrooms from the glass doors to the front facade’s window-size openings and decorative shutters (but no glass). With no roof over the span, sunlight (and rain) pours in.

In the attic, the primary bedroom suite has an oak floor and sloped walls with wood beams. A sliding door opens to a balcony with bay views.

Parking for two cars is across the road by the waterfront. A stone wall and a sloped gravel area serve as a beach, and there is a mooring for a 30-foot boat.

The house is just over a mile from the center of Tivat and Porto Montenegro, a marina with luxury residences, upscale restaurants, branded shops and a boutique hotel. The fortified town of Kotor, a UNESCO World Heritage site with coastal churches and a maze of cobblestone streets, is a 25-minute drive. Tivat International Airport is 20 minutes away.

Market Overview

The pandemic damaged the economy in Montenegro, a nation of 660,000 residents, “more than any other country in the region, causing a 15 percent decline of GDP” and an increase in unemployment from 15.3 to 20 percent, according to a U.S. State Department report.

Kieran Kelleher, managing director of Dream Estates Montenegro, a Savills affiliate, said the number of transactions at his firm dropped 55 to 60 percent last year, though prices fell a less alarming 10 to 15 percent. “We predicted a bigger drop in price due to the coronavirus,” he said, but it didn’t happen, “mainly because the developers knew they would be better off waiting.”

By last fall, Leila Calic, director of Resido Montenegro, noticed “a significant increase in inquiries to move to Montenegro full time.” Long-term rentals and purchases began accelerating in December and haven’t stopped.

“I don’t remember a summer we were so busy with purchasing requests,” Ms. Calic said, noting that shoppers often look while they are on vacation. “This summer is different. They come to purchase.”

Niko Lakovic, managing partner and sales manager of Montenegro Sotheby’s International Realty, said 2021 “is booming, and people are buying second homes.”

At Mr. Lakovic’s office, inquiries are up 500 percent and the number of sales along Montenegro’s coast are up “60 to 70 percent comparing to last season, where we were almost completely closed for arrivals,” he said. Prices are now on par with 2019, but “demand is increasing a lot.”

Prices are “quite stable” for villas at the moment, but new apartments have gone up at least 10 to 15 percent, partly because of the higher cost of building materials. “Construction is really dynamic,” Ms. Calic said.

Foreigners make up 99 percent of buyers in the “prime,” or top 2 percent, of the market, Mr. Kelleher said, noting that prices range from 7,500 to 10,000 euros a square meter or ($825 to $1,100 a square foot) for seafront properties and “within the fancy new resorts.”

By Marcelle Sussman FischlerPublished Aug. 4, 2021Updated Aug. 5, 2021