The year 2020 has made its own adjustments to the daily life of ordinary citizens: never before have we spent so much time on the Internet. Such changes have affected almost all areas of the companies’ operation. 

Pavel Itkin, co-owner of NAVIT MANAGEMENT, shared an expert opinion on how the pandemic has led to an increase in the use of information technology in real estate. 

— Pavel, could you briefly tell our readers about yourself and your working experience? 

— I am a co-owner and managing partner of the development company NAVIT MANAGEMENT. The agency manages residential real estate projects on the coast of Montenegro. 

We started with the construction of private villas and rental of real estate, and in 13 years we have become an independent company providing a full range of turnkey project management services: 

  • search and selection of land lots for investment projects; 
  • development of a business plan and a financial model; search for investments for project implementation;
  • development and approval of project documentation; 
  • construction management and commissioning of the completed real estate object; sales organization; operation of the object. 

These business processes are quite complex since they require constant monitoring at all stages of the project implementation. At the moment we are focusing on implementing our own investment projects. 

— How has the real estate market of your country changed during the pandemic? 

— In a very short period of time the market has undergone all five classic stages of accepting the inevitable: denial, anger, bargaining, depression, and acceptance. But nothing tragic has happened — all these processes will be beneficial, keeping the high-quality projects and strong players on the market.

Some of the projects are likely to fail to reach the indicators set at the planning stage, but the peculiarity of Montenegrin developers is a low debt load. Many engage in construction without borrowing money and during the sales period, having passed the break-even point, it can take them some time to sell the remaining objects as the market recovers.

There is no global drop in the cost on the primary market, but there is a price freeze at the initial level of project implementation. 

— How has the spread of COVID-19 change your company’s work? How much have the quarantine measures affected sales? 

— The construction itself has not changed much. In spring, when almost the entire country was in lockdown, the authorities of Montenegro made exceptions for construction companies. We continued to work in compliance with certain security measures. The closure of borders had a slight impact on the time frame — we had to quickly reorient ourselves to local contractors and suppliers. 

Sales have changed. Buyers have taken a wait-and-see approach. The transaction cycle has become longer, but changes have forced us to look for new tools and sales channels. 

Real estate investment in Montenegro

— Have you started working remotely? 

— Currently, most of the transactions are investment ones and they are conducted remotely. Although the Montenegrin legislation does not yet have a direct opportunity to formalize a real estate transaction remotely, as in some other European countries. However, there is a very convenient and safe option of signing the contract with the help of a representative by proxy or a long-term announcing of the selected object with signing at the moment of putting it into commission. 

Nowadays objects’ video tours, VR tours, and remote meetings with clients are in demand. 

— Are there any examples of transactions that were successful due to the new format of work? 

— Any transaction closed is a success. Especially in the present circumstances. 

The fact that transactions take place is the result of new formats of interaction with the clients. It is important to build up a relationship of trust with customers. If we manage to do it then you are likely to come back for a new deal. 

— Do you have any forecasts for the market recovery after the pandemic? 

— The real estate market in Montenegro is highly dependent on tourist flows. At the moment, prices for high-quality objects under construction are frozen at the level set in spring this year, but they will definitely quickly gain back the potential for growth when the tourism market begins to recover. 

Those who are currently purchasing properties at the final stages of implementation are sure to get a good increase in the capitalization of their investments in the future. Montenegro provides a sufficient number of resorts with a low tourist density, and these are the destinations that will be popular next season. 

— What projects are you working on now? 

— Our company is currently working on the following projects: 

  • new comfort class residential complex in Budva; 
  • boutique hotel in Petrovac; 
  • 4 Star hotel complex with a private beach in the Luštica Peninsula. 

We want to create a project that could operate all year round. Therefore, we need to carefully consider the entire infrastructure of the complex.