"We have felt the decline, mainly as a result of fairly high prices that are not quite competitive in the region," Aleksandar Vukicevic, the manager of the estate agents Montenegro Prospects, said in an interview with the weekly, Investor.

He said other reasons for the lack of enthusiasm among the British and Irish included the sub-prime mortgage lending crisis in the US, which made them more anxious about taking out further loans, and more importantly, poorer returns on Montenegrin properties.

"Properties were bought until recently partly because of the market boom, but since there are no longer price leaps of 30-40% [per annum], the rental income becomes a more prominent issue", Vukicevic said.

However, he said that income from renting out holiday homes was currently limited by the relatively short season, and added that lengthening the season beyond the summer months might increase interest in buying properties because they would be available to rent for longer.

That requires holding events and festivals to attract more holidaymakers in the months of April, May and November.

Vukicevic argued that the British were particularly inconvenienced by the lack of direct flights from the UK to Tivat airport on the Montenegrin coast.

By contrast, there are nine flights a week from Moscow in the summer months.

Source: BalkanInsight.com