Montenegro has received more than 78 new apartments in just 12 years, while the population has grown by only two percent. Despite a construction boom that has placed the country among the European leaders in terms of housing construction intensity, data from the latest document by the Economic Commission for Europe (UNECE) shows that as many as 46 percent of housing units are not permanently occupied.
"The 2023 Population and Housing Census recorded a total of 392.909 dwellings in Montenegro, which is 78.205 more than in the previous census in 2011. However, only 72% of dwellings are intended for housing, while the rest are used for other purposes, for example, for tourism and holiday homes," notes the UNECE.
The fact that as many as 46% of apartments are empty represents, according to the UNECE, an alarming situation in the housing market, which needs to be addressed with policies that should be aimed at returning apartments to permanent use and occupancy to the greatest extent possible.
The document “Country Profile of Montenegro in the field of urban development, housing and land management” was prepared by the Economic Commission for Europe (UNECE), which is part of the UN. Country profiles in the field of urban development, housing and land management are designed to help governments improve the performance of public policies in the housing, urban development and land management sectors, as well as to promote sustainable development. The Country Profile of Montenegro in the field of urban development, housing and land management was prepared in response to a request from the Government, sent through the Ministry of Spatial Planning, Urbanism and State Property.
Apartments grew faster than population
"Although the housing stock increased by 26% between the two censuses (2011 and 2023), the population grew by only 2% and the number of households by 15%. Therefore, the housing stock grew significantly faster than the population, with an uneven distribution of investments. Statistical data indicate that housing construction is most intensive in coastal municipalities and Podgorica, while municipalities in the interior of the country recorded a decrease in the number of apartments (Andrijevica and Mojkovac) or only a slight increase (Šavnik and Pljevlja, less than 0,5%)," states the UNECE.
The document notes that the number of apartments per 1.000 inhabitants in Montenegro increased from 508 in 2011 to 627 in 2023, an increase of 23 percent. At the same time, this indicator was 21 percent higher than the European Union average, where there were 517 apartments per 1.000 inhabitants. It also states that Montenegro recorded a relatively high rate of new housing construction in 2022, as completed apartments accounted for 1,7 percent of the total existing housing stock, which is almost double the EU average for the same year.
The authors state that a slight decline in the number of completed apartments built by companies was recorded in 2023. At the same time, a decline in the number of building permits and construction applications was also recorded compared to the peak reached in 2017. The document assesses that one of the reasons could be the adoption of the new Spatial Planning Law, which is why investors, ahead of its entry into force in 2018, sought to secure permits earlier in order to avoid possible delays and uncertainty in future procedures.
"These housing supply indicators need to be analyzed in correlation with other data, such as empty houses, secondary housing units, apartments used for tourism purposes such as Airbnb, and abandoned houses and apartments. According to the results of the census conducted in 2023, 72,72% of the housing stock was classified as permanent housing units, compared to 64% in 2011, indicating a trend of decreasing empty and temporarily empty housing units, although this share still remains high, at 27%. However, of the apartments for permanent residence, only 75% are occupied apartments, while the rest are temporarily empty or abandoned, which means that of the total number of residential apartments in Montenegro, only 54% are continuously occupied," the document states.
No criteria for living conditions
It was further pointed out that the distribution of permanently occupied apartments among municipalities differs significantly and that municipalities with over 50% of apartments not used for permanent residence are located in the coastal region, which is understandable due to “condo tourism”.
“In northern municipalities, the main cause is depopulation. Žabljak, for example, increased the number of apartments by more than 30% between 2011 and 2023, despite an 18% population decrease,” the UNECE states.
When it comes to housing conditions, it is emphasized that the Government has not yet adopted standards for adequate living conditions, such as minimum floor area for different household sizes, the definition of residential (over)population per dwelling unit, and other affordability standards for persons with disabilities.
"Another important indicator for assessing the adequacy of living conditions is access to a source of clean water. According to the results of the 2023 census, although 97% of the population has access to water supply, only 81,5% is connected to a public or municipal water supply system, while 19,5% of the population relies on individual sources, such as water pumps or wells," the UNECE states.
The document points out that the housing sector is a key component of the Montenegrin economy, as it reflects the demand for housing and the development of the construction industry.
"This sector has seen a boom in residential construction, through the construction of collective housing, luxury villas and tourism properties, largely driven by the growth of tourism, but also by urbanization and foreign investment. Residential construction has been an important contributor to economic growth, with significant development projects in major cities such as Podgorica, Budva and Kotor," the document states.
The authors also state that in 2023, the share of gross value added of the construction sector together with real estate activities amounted to 8,8% of GDP, while the construction sector alone contributed 3,5%.
UN seeks a single housing policy leader
UNECE states that housing policy in Montenegro is currently fragmented between multiple national ministries and agencies, leading to overlapping responsibilities, limited coordination, and reduced efficiency of public policies.
“Although the Ministry of Spatial Planning, Urbanism and State Property is key
institutions, and other ministries, including the social welfare department, continue to participate in housing-related programs. At the same time, local government units are legally responsible for urban planning and land use, but face limited capacities to plan, finance and provide housing services,” the document states.
It was emphasized that strengthening institutional coordination and defining individual competencies at the national and local levels is crucial for the effective implementation of housing policy.
It was recommended to consolidate the coordination of housing policy within a single national ministry or body responsible for housing, including social and affordable housing, renovation and upgrading programmes for informal settlements.
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