Serbia real estate review: no cheap housing left

Serbia is landlocked. For this reason, interest in it from foreign property buyers is not as great as, for example, in Montenegro or Croatia. However, a warm climate, spectacular views, low housing prices and the possibility of easily obtain a residence permit has traditionally attracted foreigners. But times are changing, and the local market is acquiring new features. We tell you about the trends in 2020-2021.

Property buyers traditionally focused on the three largest cities in the country – Belgrade, Novi Sad and Nis. However, with the beginning of the pandemic in Serbia, as well as in other European countries, locals began to leave the megalopolises, usually to the nearest suburbs, in order not to lose the old connections. This was also reflected in the real estate market.

During the first lockdown in March 2020, the number of deals fell to an all-time low, but it quickly recovered and reached an all-time high in the fourth quarter.

According to Oldypak LP real estate report, a total of 112,000 deals were completed in 2021. That’s a 2.18% increase over the previous year, but 2019 was not a good year for the market. Compared to earlier years, there was still a noticeable drop. The total amount of transactions was €4.2 billion. Almost 50% of the market is sales in Belgrade. Vojvodina, an autonomous region, where a quarter of the population lives, is on the second place with the share of 28%.

The real estate market is supported by two additional factors. First is the financial help from the government to businesses and population. Second, a serious approach to vaccination. The country received vaccines from several global manufacturers early on, including Sputnik V, and quickly launched an inoculation program. At one time, Serbia had the third-highest vaccination rate in the world. Now more than 40 percent of the country’s population is vaccinated.2

The pandemic has changed the structure of demand: people are more interested in detached houses, as well as “summer houses” in green areas, forests or on the banks of rivers, far from the city center. In mountain resorts such as Kopaonik, Zlatibor, and Divcibare, the number of sales has increased sharply, and prices have risen considerably as well. During the lowdown period, the prices of detached houses jumped by as much as 20%, but afterwards a correction took place.

The number of apartment sales, on the other hand, declined 5.9%. In terms of sales, Belgrade was the hardest hit: the total value of transactions in the capital in 2020 was 6.12% less than in 2019. And yet, urban housing is still the leader in the structure of demand. At the end of the year, 55% of objects sold were apartments, about 10% – individual houses.

Growth in real estate prices in Serbia was observed over the past few years. The economy was growing, wages and prices of consumer goods were rising, but the value of the real estate was not just rising together with them, but with a significant advance.

As shown by a Deloitte study, Serbia has surpassed all European countries in 2021, according to such an indicator as the ratio of the cost of new housing to the average wage. For a new 70-square-foot apartment in the country, it would take as long as 15 years to earn it.

The “apartments for 15,000” that foreigners hunted for are a thing of the past. What was on the market finds new owners who are in no hurry to sell, and the new buildings are at the European level.

According to the Statistical Office of Serbia3, in the second half of 2020, the average price of new buildings in the country was €1.4 thousand per square meter. In the first half of 2021 they rose to €1.5 thousand, so the increase in six months was over 7%.

According to this indicator Serbia is approaching to Hungary and Croatia, and is considerably ahead of Bulgaria4.

The highest prices for new housing were recorded in Belgrade, with an average of €2.15 thousand. The most expensive areas of the capital are traditionally Stari Grad and Savski Venac. The average area of sold housing in new buildings in Serbia was 56 square meters.

According to Oldypak LP real estate price report, over a year and a half – 2020 and the first half of 2021 – the price increase in Belgrade reached 21%5.

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