Apartment prices in Serbia are sky-high, is an additional increase realistic?

Apartment prices in Serbia are "sky-high," and because of that, experts claim, sales have been stagnating for some time since fewer and fewer people can afford to buy them. However, prices continue to rise. Real estate prices in Serbia have increased by 5 to 20 percent this year, with the highest prices per square meter recorded in the capital, Belgrade, said Milić Đoković, vice president of the expert council of the Real Estate Cluster of Serbia.

According to him, apartment prices have increased compared to last year’s average, which was already high compared to the previous year. The biggest price hikes have been in Vojvodina, while the most expensive square meters are being sold in Belgrade. Đoković pointed out that real estate prices have risen due to inflation and wage growth, and he believes prices will continue to rise unless inflation stabilizes.

He explains that apartment prices in Belgrade range from 2,000 to 10,000 euros per square meter and that there is no significant difference in price between new and old buildings, with a range of 10 to 20 percent.

"When it comes to older buildings, the price depends on how old the building is, whether the apartment is well-maintained, and how much has been invested in it. The average price of new construction is around 3,000 euros per square meter, while the average for older buildings in Belgrade is between 2,300 and 2,400 euros," Đoković stated.

Kaća Lazarević, owner of the real estate agency "Kaća Lazarević Nekretnine," disagrees with Đoković’s opinion that real estate prices will continue to rise, claiming that they are already overpriced, which is why apartment sales are declining. "When it comes to older buildings, prices have been stagnant since the beginning of last year. Simply put, apartment prices are very high, and people cannot afford to buy real estate. That's why prices in older buildings are being lowered to prevent a drop in sales. The situation is such that buyers are willing to spend 150,000 to 200,000 euros at most on an apartment. This situation will not change until people have more money and the government starts building smaller apartments for young people at affordable prices," Kaća Lazarević told NIN.

She added that prices are especially high in new construction, while in older buildings, it is possible to negotiate the price, meaning the initial price can be lowered to facilitate a sale. High prices and low purchasing power are causing a stagnation in sales, and this year has seen a significantly lower volume of transactions than last year.

According to her, the problem is also that investors are pumping money into new construction and setting prices contrary to what they should be.

As she pointed out, the most expensive small apartments in older buildings, around 35 square meters, are scarce and cost between 3,500 and 5,000 euros per square meter in the center of Belgrade. Prices for new apartments over 100 square meters range from 5,000 to 7,000 euros.

Decline in apartment sales in Belgrade

Data from the Republic Geodetic Authority for the first quarter of this year shows that apartment sales in Belgrade have decreased by 6.5 percent, with the value of transactions down by 10.13 percent.

A similar situation is in Vojvodina, where the number of apartment sales dropped by 4.32 percent, and transaction values fell by 0.56 percent. However, Šumadija and western Serbia recorded a significant increase in apartment sales by 11.28 percent, with transaction values up by 24.04 percent. Southern and eastern Serbia also saw growth, with a 4.92 percent increase in apartment sales and a 37.5 percent rise in transaction values.

In Serbia, the most expensive apartment sold in the first quarter of this year was in the Belgrade municipality of Vračar for 1.22 million euros.

The most expensive house was sold in the Belgrade municipality of Savski Venac for 3.18 million euros. Vračar also had the most expensive square meter in the first quarter of 2024, costing 10,350 euros, according to the statement.

The most expensive garage space in the first three months of this year was paid 73,000 euros, also in Vračar, while the highest price for commercial space was 3.09 million euros, paid in the Savski Venac municipality in Belgrade. The total amount of money spent on real estate purchases in Serbia in the first three months of this year was 1.5 billion euros, which was 2.6 percent less than in the same period last year, according to the Republic Geodetic Authority (RGZ).

An overview of the average prices of new apartments in Serbia is available on the page: https://www.prodaja-nekretnina.com/sr/cijene-nekretnina/.

Tržište nekretnine, 12. Oct. 2024.