Own A House - real estate market news

Real estate market in Montenegro favorably differs with its strategic direction to tourism (as a matter of fact is a main income source for Montenegro).

The main market of real estate in Montenegro includes apartments, country houses, houses, hotels, restaurants, bars, i.e. the commercial and residential real estate intended for tourists and rest. The prices for such real estate, certainly, depend on a site and closeness to the sea. Having summarized - 1400 euros for sq. meter in a country house, house, and an apartment from 500m from the sea and farther. More than 2000 euros for sq. meter cost the real estate at the coast.

The Western Europe has always considered Montenegro as a place created for rest. Montenegro and the seaside in particular, has turned to an enormous building site for construction of elite real estate (country houses, houses, hotels) and apartments. Restaurants and bars are under construction everywhere and are offered for sale.

Real estate in Montenegro stably rises in price, taking the lead over statistics of other European countries; it is also find a ready rent market.

The legislation of Montenegro allows foreigners without difficulty to buy and sell both commercial and residential real estate. Procedure of registration is easy and takes a few days.

2007 was marked by:

1. The largest landslide of prices in the American market for the last decade;

2. Terrible mortgage crisis when more than one million Americans were put in jeopardy;

3. Global crisis of liquidity, in other words, trust of financiers to each other, which was the consequence of first two factors;

4. Sharp change of Federal Reserve System’s policy: from inflation containing and increase of rates - to numerous reductions of key rates with the purpose to rev up the economy, balancing on the verge of recession;

5. Active intervention of the Central Banks and the governments of the USA and the Great Britain in internal affairs of the financial markets - at the instance of figurants or without it (the Bank of England has offered the rescue program of one of the largest mortgage banks of the country, Northern Rock, Bush’s administration - the rescue program of many mortgage borrowers);

6. Mass bankruptcies of the largest mortgage companies, first of all in the USA;

7. Record losses of banks all over the world - only in Europe the question is about tens of billions;

8. Disappointment of investors in the world’s most expensive real estate – British market;

9. The transformation of pluses in minuses - falling in price of that, which was just increased in prices;

10. Reorientation of real estate’s buyers to “exotic”: Panama, Azores, Arabian countries, and also to northern markets which are at present obviously undervalued (Finland, Estonia).

Rich foreigners have already for a long time bought the second dwellings in megapolis like New York and Miami, and not only for business purposes and entertainments, but also as profitable investments. But recently this tendency has even been intensified.

According to the National Realtors’ Association, the last year each fifth realtor company has pushed the business through the foreign investor. Fast decline in dollar’s value to euro and English pound this year has strongly reduced the price of the American houses for Europeans, and landslide of prices because of mortgage crisis has made them more attractive for other foreigners.

Realtors also mark, that high-interest of foreigners to investments in the American real estate has led to increase in demand for houses in before unpopular areas.

The report «Beige Book» which is published on a regular basis and describes economic climate of the USA as a whole and separate regions in particular, has disappointed investors with its vagueness and first of because of absence of FRS’ promise to lower both long and short interest rate.

US real estate market should be mentioned here separately, as the climate of this market has recently riveted stockbrokers’ attention. Real estate market, yet even before the burst crisis at stock exchanges, as of July showed the lowest sales for the last six years. Experts of this sector of the market, as a wonder-working remedy see the further decrease of the loan rates. Otherwise they predict, the US economy will fall in long and gloomy recession.

However FRS does not reduce the rate not in vain, as all would be too simple, if the simple lowering of interest rate was a universal remedy.

Moods of investors were expressed in a rush jettison of shares for the benefit of reliable bonds purchase. In general, the market is subject to mass moods and very sensitively reacts to news and rumors, sometimes not adjusting influence scope of the received data.