Investing in Real Estate in the City of Cetinje

Published on January 17, 2026 and written by Cyril Jarnias

Investing in real estate in [Cetinje] means betting on a unique city within the Montenegrin landscape. A former royal capital, a “museum-city” nestled at the foot of Mount Lovćen, in the heart of an amphitheater of limestone mountains, it is located halfway between the beaches of Budva or Kotor and the major infrastructure of Podgorica. Yet, unlike the coastal cities overheated by speculation, its market remains confidential, affordable, and driven by ambitious urban and heritage requalification projects.

[Cetinje], a former royal capital turned “museum-city”

The status of [Cetinje] is unique: a “former royal capital” and honorary capital of Montenegro, it remains the administrative center of the municipality of the same name. Founded in the late 15th century by Ivan Crnojević, who built his court and a monastery there, the city developed around the first South Slavic printing house, the Crnojević publishing house, active from the 1490s. It owes its name to the Cetina River and is situated on a small karst plain surrounded by limestone reliefs.

The historic center concentrates an exceptional heritage: the [Cetinje] Monastery, Vlaška Church (15th century), Biljarda royal residence, King Nikola’s Palace, Zetski Dom theater, former foreign embassies, national museums. It is this urban core that is on the UNESCO tentative list as “Cetinje Historic Core,” classified as a Category I cultural monument and a potential candidate for World Heritage status.

A niche real estate market, far from the coastal frenzy

On the scale of Montenegro, the real estate market is expanding rapidly, with average prices having jumped by more than 15% since 2023, and annual increases exceeding 20% for new homes. On the coast, prices have soared by about 50% between 2023 and 2024, due to the combined effect of international tourism, surging foreign investment, and a dwindling supply of new properties.

Price per m² Comparison

Here is a summary of how [Cetinje] compares to the major Montenegrin areas mentioned in the available data:

Area / City	Market Type	Indicative Price per m² (approx.)
[Cetinje]	Continental, historical	900 – 1,500 €
Podgorica (capital)	Urban, balanced	approx. 1,580 – 1,760 €
Bar (coast, rising market)	Coastal, mixed	≈ 1,400 € (2023 average)
Budva (riviera, mass tourism)	Premium coastal	1,500 – 3,000 € (standard)
Kotor (Old Town, bay)	Historic coastal	approx. 3,000 €/m² (Old Town)
Tivat (Porto Montenegro, luxury)	Luxury coastal	3,000 – 10,000+ €
Luštica Bay (integrated luxury resort)	Ultra-luxury coastal	6,000 – 15,000+ €
Mountain towns (Kolašin, Žabljak)	Mountain, ski & nature	900 – 1,500 €

While the coast is clearly a seller’s market, with demand exceeding supply and relatively short sales times, [Cetinje] remains a niche market, slower, where negotiation is still possible and where patient investors can target character properties or well-priced land.

Very limited, but diversified supply

On the major real estate portals surveyed, the city only lists about a dozen ads at the time of data collection, compared to several hundred in Budva, Kotor, Bar, or Tivat. This low volume reflects two realities: a more limited stock, and, above all, a lower volume on the market, as many families keep their properties for generations.

– apartments in central buildings (often from the 60s-80s or newer),

– typical stone houses, sometimes needing restoration, especially near Lake Skadar or in the surrounding villages,

– buildable land, including large rural plots for tourism or eco-home projects,

– commercial premises and small rental buildings in the city center.

The examples cited in recent listings give a good idea of the price range:

Property Type	Location (examples)	Main Characteristics	Indicative Price
2-room Apartment – 66 m²	Center of [Cetinje]	2 bedrooms, central	120,000 €
2-room Apartment – 64 m²	Gruda neighborhood, [Cetinje]	Residential, recent	100,000 €
New Apartment – 63 m²	Gruda	2 bedrooms, recent construction	99,500 €
1-bedroom Apartment – 45 m²	New building	3 m² terrace	100,000 €
1-bedroom Apartment – 48.3 m²	Under construction	Terrace, upcoming delivery	70,000 €
Renovated Stone House – 120 m²	Near Lake Skadar	Traditional house, nature view	540,000 €
Land + Old House	Near road & Skadar	22,500 m² of land	80,000 €
Large Rural Land – 167,866 m²	Near Cetinje-Budva road	Agricultural/tourism use, to develop	Price upon request

There are also specific listings for land in the Bobija region, not far from Lake Skadar, with possibilities for building bungalows and restaurants starting from 40 €/m², opening the door to eco-tourism or glamping projects.

Macroeconomic context and legal framework: a country oriented towards the EU

To understand the appeal of [Cetinje], the investment must be placed in the broader context of Montenegro.

The national economy remains fragile as it is highly dependent on tourism, real estate, and foreign capital, but it follows a rather positive trajectory: GDP growth around 3% per year, public debt in relative decline, budget surplus, high annual flows of foreign direct investment (FDI), nearly half of which is directed towards real estate. The total volume of real estate transactions is expected to exceed 600 million euros in 2025, with a residential market estimated at nearly $20 billion.

For foreign investors, the legal framework is attractive:

The main limitations mainly concern the acquisition of agricultural land, forests, land in national parks, or in areas sensitive for security or cultural heritage. For these categories, it is sometimes necessary to go through a Montenegrin company or obtain specific authorizations. For an apartment or a house in town in [Cetinje], a foreign investor remains in a simple framework.

Taxes, acquisition costs, and tax regime in [Cetinje]

Montenegro has implemented a fairly readable tax system, recently reformed, which applies in the same way in Budva, Podgorica, or [Cetinje]. Municipalities have some leeway to set property tax rates within a range defined by law, but the main principles are the same everywhere.

Property purchase cost

For a resale property in [Cetinje] (old apartment, house, or land), the investor will need to factor in:

– a progressive Real Estate Transfer Tax:

– 3% up to 150,000 €,

– 4,500 € + 5% of the portion above 150,000 € up to 500,000 €,

– 22,000 € + 6% for the portion over 500,000 €.

– regulated notary fees, typically around 350 € + VAT for a 100,000 € purchase,

– lawyer fees (highly recommended), often 1,000 to 1,200 € for a standard transaction,

– interpreter fees if the buyer does not speak Montenegrin,

– cadastral registration fees (0.5% of the cadastral value),

– potential international bank transfer fees (0.25% to 1% of the amount).

In the case of a new property sold directly by a developer subject to VAT, the 21% VAT replaces the transfer tax: the advertised price normally includes this VAT, and no additional registration tax is due.

Ongoing holding taxation

Once an owner, the investor pays an annual property tax, calculated on the market value as of January 1st of the fiscal year. The national law sets ranges, but each municipality — therefore the municipality of [Cetinje] — adopts its own decision. For a residence, rates are generally between 0.25% and 1% of the value, higher for unbuilt building plots (up to 5%) and for certain commercial uses.

An annual tourist tax is often added for properties in tourist areas, but since [Cetinje] is more of a cultural and continental destination, the pressure in this regard remains lower than on the coast.

Rental taxation and capital gains

Renting a property generates taxable income. According to sources, the mentioned rate varies (9% or 15%), but the most frequently cited scheme is as follows:

For seasonal rentals like Airbnb, a system of permits and categorization of accommodations has been established. The owner must register, obtain an official category (star rating), and pay the corresponding taxes.

On capital gains, the tax is set at 15% of the net gain (sale price – purchase price – improvement costs), with possible exemptions for the primary residence or certain holding periods. Again, the rules are national and do not specifically vary for [Cetinje].

Legal framework and acquisition procedure

The Montenegrin system is based on a unique and public cadastre, the “Real Estate Cadastre,” administered by a dedicated directorate. The key feature for an investor in [Cetinje] is that property is only legally acquired upon registration in the cadastre: the contract alone is not enough, registration has a constitutive effect on the right for transactions.

The standard procedure includes several steps:

This point is crucial, as a significant portion of the Montenegrin stock suffers from irregularities (illegal extensions, unlegalized buildings). In a city with sensitive heritage like [Cetinje], additional constraints related to monument protection apply: it may be impossible to modify certain facades, add floors, or use materials not conforming to conservation requirements.

– 2. Preliminary agreement and deposit It is common to sign a preliminary contract (Sporazum) that sets:

– the price,

– the deadline for signing the final deed,

– the amount of the deposit (often 10% of the price),

– the termination conditions.

4. Payment of transfer tax and registration The transfer tax must be paid within a strict deadline (generally 15 days) under penalty of daily fines. The notary or lawyer then submits the registration application to the cadastre. Once the registration is validated, the buyer officially becomes the owner.

For a foreign investor, the entire procedure can be carried out by proxy, without physical presence, if a notarized power of attorney is established and legalized in the country of origin.

An attractive living environment for a specific clientele

Investing in [Cetinje] isn’t just about buying square meters: it’s about positioning oneself for a lifestyle and well-defined clienteles.

The city enjoys a cooler climate than the coast, very pleasant in summer. The beaches of Budva or Kotor remain accessible by car in 30 to 60 minutes, while the trails of Mount Lovćen are at the city’s doorstep. Lake Skadar, a huge nature reserve, is also nearby. For families or retirees, [Cetinje] offers:

The city is described as clean “on average” for a small Montenegrin town, with tap water meeting European standards, free public Wi-Fi coverage (the first in the country to offer it), limited 24/7 services but supermarkets open late. Gyms or specialized studios (yoga, martial arts) are less present, reflecting a more traditional lifestyle.

The market for digital nomads remains anecdotal, with many preferring the coast or Podgorica, but the city already attracts expatriates seeking tranquility, nature, and culture, away from mass tourism.

A tourist ecosystem focused on culture and nature

Unlike seaside resorts that live to the rhythm of the summer high season, [Cetinje] plays a different card: that of culture, history, and the surrounding nature.

The main tourist assets include: picturesque landscapes, historical heritage, local gastronomy, and outdoor activities.

This identity has been strengthened by major urban requalification projects, notably the “Beautiful Cetinje” program, conducted with the UN (UNDP) and several donors (Turkish and Montenegrin governments, municipalities of [Cetinje] and Mojkovac). Between 2011 and 2019, this program enabled:

These public investments improve the overall attractiveness of the city for visitors and residents, which is a positive signal in the medium term for property owners: a well-maintained city that values its heritage and develops its cultural ecosystem supports property value better than historic centers left in neglect.

Airbnb and seasonal rental: a niche, but structured market

Specific data on short-term rentals in [Cetinje] show a modest, but far from non-existent market. During the period May 2024 – April 2025, there were 61 active listings on Airbnb in the city and its surroundings, confirming the “niche” character of the market.

The supply structure is very clear:

– 96.7% of listings are entire homes (houses or apartments),

– 73.8% are apartments/condos,

– 62.3% of accommodations offer one bedroom (dominant configuration),

– properties with 3 bedrooms or more represent only 8.2% of the total.

In terms of amenities, travelers expect basic standards: Wi-Fi, kitchen, TV are almost mandatory. The average number of people a property can accommodate is 3.4, but the most frequent capacity remains two people.

Seasonality and performance

Seasonality is marked but less extreme than on the coast, with a peak in occupancy between July and September, and the month of August concentrating the best figures:

During the peak month, the best properties can reach:

– up to $859 in monthly revenue,

– 46.6% occupancy,

– an ADR of $59.

Conversely, the weakest month sees revenues around $171, 13.5% occupancy, and an ADR of about $50.

The distribution by performance well illustrates the dispersion of results:

Airbnb Performance Level [Cetinje]	Monthly Revenue (approx.)	Occupancy (approx.)	ADR (nightly rate) (approx.)
Top 10% (“best in class”)	> $864	> 53%	> $84
Top 25% (“strong”)	≥ $521	≥ 38%	≥ $56
Median (typical)	≈ $295	≈ 23%	≈ $40
Bottom 25% (“entry level”)	≈ $150	≈ 11%	≈ $30

For an investor, these figures mean two things:

1. The absolute level of seasonal income is modest, especially compared to the coast, but the much lower purchase prices partly compensate. 2. The quality of location and product (finish, comfort, heritage storytelling) clearly makes the difference between an average property and a “best in class” one.

Who comes to [Cetinje] and where to invest for short-term rentals?

The most relevant areas for an Airbnb or seasonal rental project are those that connect to cultural and natural attractors:

For this type of investment, a well-renovated one-bedroom apartment in the old town or in immediate proximity to the main monuments can aim for performance in the top quartile if management (photos, reviews, cleaning, welcome) is professional.

Rental yields: The positioning of [Cetinje]

Overall data on gross yields in Montenegro indicate ranges of 4 to 8% depending on cities and segments. On the coast, one generally speaks of 4.4% to 7.1% for apartments, with peaks of 10% in the best integrated developments during high season. In Podgorica, yields oscillate between 5% and 7%.

For [Cetinje], available information explicitly mentions gross yields on the order of 6 to 7% for traditional apartments. This level is interesting, especially given the contained acquisition prices. It reflects two phenomena:

For an investor, a mixed strategy can be relevant:

– seasonal rental (like Airbnb) during the most profitable months (summer, major cultural events),

– medium or long-term rental for the rest of the year (art students, teachers, civil servants, local families), to smooth out seasonality.

Structuring projects and appreciation potential

Beyond the simple current situation, the key question for an investor is the future evolution of [Cetinje]. Several factors point towards a strengthening of its attractiveness, and therefore the appreciation of its real estate.

UNESCO inscription and international image

The historic center is already on UNESCO’s tentative list. A potential inscription as a World Heritage site would mechanically raise [Cetinje]’s profile among international tourists, cultural institutions, and heritage enthusiasts. The experience of other UNESCO cities often shows a positive effect on tourist flows and on the perception of properties located within the protected perimeter — with, in return, stricter renovation constraints.

Kotor–[Cetinje] cable car project

A tender was launched in 2016 for the construction of a cable car linking Kotor to Cetinje. Even if the project has been delayed, the mere fact that it is on the agenda reflects the authorities’ will to better connect the coast and the former capital. If such infrastructure materializes, the effect on tourist traffic would be immediate: Cetinje would become a natural excursion for cruise passengers and vacationers from Kotor, with an increased flow of day-trippers and also short-stay visitors.

Renovation of the Grand Hotel Lokanda

An emblematic project illustrates the dynamics of revaluing the historic center: the reconstruction of the former Lokanda hotel, the city’s first hotel built in 1864, destroyed by the 1979 earthquake. The municipality has entrusted, via a public-private partnership, the design, financing, reconstruction, and management of the future Grand Hotel Lokanda to the company Talija (Herceg Novi), for an amount of 13.78 million euros.

The project includes:

– a four-star hotel with 48 beds, right in the historic heart at the end of Njegoševa Street,

– an underground parking lot with 130 spaces,

– the comprehensive redevelopment of the adjacent Artists’ Square.

For an investor acquiring an apartment or commercial space in the immediate vicinity today, it is reasonable to anticipate a ripple effect on rents and resale prices in the medium term.

A pivotal territory between coast and interior

The municipality of [Cetinje] occupies a strategic geographical position, at the crossroads of seven other major municipalities: Kotor, Tivat, Budva, Bar, Podgorica, Danilovgrad, and Nikšić. It is squeezed between the Bay of Kotor, the Budva Riviera, the Lake Skadar basin, and the central hinterland. This situation makes it a natural base for exploring the entire country.

As infrastructure improves (Bar–Boljare highway reducing travel times to Serbia, expansion of Podgorica and Tivat airports, etc.), the overall accessibility of Montenegro progresses. [Cetinje], already relatively close to major hubs, indirectly benefits from these modernizations.

Possible investment types in [Cetinje]

Combining all the previous elements, several real estate investment profiles in [Cetinje] can be distinguished.

Apartment in the old town or expanded center

This is the natural target for:

– an investor wanting a heritage pied-à-terre, for personal use part of the year,

– a mixed rental project (touristic/cultural + long term).

Advantages:

– reasonable entry prices for a European historic center,

– potential for capital gain linked to UNESCO and hotel projects,

– high use value (quality of life, proximity to everything on foot).

Points to watch:

Stone house to restore, in villages or near Lake Skadar

For investors attracted to eco-tourism, permaculture, or nature retreats, listings for traditional houses with large plots around Skadar or in the rural areas of the municipality constitute an obvious opportunity: hundreds of thousands of square meters of land for prices sometimes lower than a 60 m² apartment in the city center.

This strategy can target:

– charming guesthouses or bed & breakfasts,

– micro-resorts of wooden or solid bungalows,

– wellness centers, artistic workshops, yoga retreats, etc.

Risks:

Commercial premises and small rental buildings

The dimension of a “museum-city” and national cultural center implies a permanent presence of civil servants, academics, visitors, but also artists and temporary workers. Commercial or office premises on the ground floor of central buildings can interest:

– investors who rent to cafes, souvenir shops, galleries, bookstores,

– those who create a hybrid space themselves (coworking, cultural cafe, concept store) to ride the wave of the city’s rise in tourist and creative circuits.

Rental buildings, rare but existing, can allow pooling rental risk by combining long-term housing and seasonal units.

Specific risks to consider

No market is exempt from risks, and [Cetinje] is no exception. Some are general to Montenegro, others more specific to this small town.

Among the main points of attention:

A serious investor must therefore imperatively:

Investor profile for [Cetinje]

Given all this data, [Cetinje] does not appeal to the same profile as Budva or Tivat.

It is a relevant destination for:

On the other hand, it is not the ideal target for an investor seeking only maximum short-term rental yield via Airbnb, nor for one wanting to play a very quick “flip” linked to foreign speculation: for that, seaside resorts or some rapidly expanding ski projects remain more suitable.

Conclusion: a heritage niche to watch closely

In a country where coastal prices are climbing to levels sometimes comparable to neighboring Italy or Croatia, [Cetinje] still retains the characteristics of a “reasonable” market: contained purchase prices, possible gross yields of 6 to 7% on housing, a less marked bubble risk than in seaside areas, and a stable demand base linked to the city’s cultural and administrative functions.