2024 - the perfect time to buy an apartment? Expert Espreso: will prices go down?

Photo: Nenad Kostić, Private archive, Aleksandar Stojanović

Everyone who postponed buying real estate due to the wild fluctuations in square meter prices hopes that by 2024 the situation in the real estate market will become favorable enough.

Due to the constant rise in prices in the past period, new and old construction have practically leveled out. The domestic market recorded a sharp decline - over the year, apartment sales dropped by almost 35% in Novi Sad, by 21.5% in Belgrade, by 15.3% in Niš, and by 12.8% in Kragujevac. Considering that demand and prices are causally linked, there have been changes in price formation. The demand and sales of old construction have decreased, and simultaneously, prices have also fallen.

Real estate expert Erwin Pashanovich shared his views on the current state and prospects of the real estate market in Serbia for Espreso. Our interviewee points out the complexity of the factors influencing the dynamics of this sector.

- To be honest, I don't like to make predictions too much, because besides fundamental and technical analysis, we have to consider that our real estate market is relatively small and less liquid. Any geopolitical or economic impact is quickly felt, and interventions such as COVID, the conflict in Ukraine or the Middle East, as well as the involvement of a significant investor or a large government program, can directly and rapidly change market conditions, - notes Erwin Pashanovich for Espreso.

Erwin Pashanovich, photo: Private archive

Pashanovich predicts that prices for new construction will remain stable in the coming months, while prices for older construction may face a slight decline.

- Given the current interest rates, elections, and seasonal influences, I assume that prices for new construction will remain at this level for at least the next few months, while prices for existing properties may decrease slightly. Of course, this refers to residential real estate. Commercial real estate is already in a stagnation phase, - says real estate expert Pashanovich.

Our interlocutor emphasizes that the domestic market depends on the dynamics of supply and demand.

- Our market is still based on supply and demand, and this determines prices. However, it should be noted that in our mentality, people find it very difficult to lower their predetermined income levels, and unless they are forced to, they are willing to wait for years to achieve the desired value, - says a real estate expert for Espreso.

Buildings / illustration, photo: Nemanja Nikolic

Will there be a greater decline in real estate prices in 2024?

As for the forecasts for next year, Pashanovich predicts a slight decline in the apartment market, but rules out the possibility of significant corrections.

- In 2024, based on current indicators, I expect a slight decline, but no significant corrections, and this could change quickly according to psychological expectations. If we only consider the apartment market, then 5-10% is what would be projected with a big caveat that any hint of improvement will lead to a shift into a positive trend, emphasizes Erwin Pashanovich.

Pashanovich reminds that the domestic market is not prone to sharp price changes and rules out the possibility of a "bubble" burst.

- The decrease in demand, as I mentioned, is causing adjustments in the market, but I don't see any sharp changes in prices and I don't think such changes are expected in our economy. I want to emphasize again that we are not inclined to lower prices, and I don't think the "bubble" will burst here, - says Pashanovich, adding in conclusion: - Small central urban properties will maintain their prices, as will the premium segment; I assume that the correction will pertain to older buildings on the outskirts with larger areas.

Prices for new buildings

According to the Republican Institute of Statistics, the average price of new buildings in the Republic of Serbia in the first half of 2023 was 214,017 dinars, which represents a decrease of 1.8% compared to the second half of 2022. The average price of new buildings in the Republic of Serbia in the first half of 2023 was 214,017 dinars, which means a decrease of 1.8% compared to the second half of 2022.

During the considered period, apartment prices fluctuated between 52,481 dinars per square meter in Bujanovac and 489,634 dinars in the Belgrade district of Savski Venac.

Prices for new buildings by districts/cities, photo: Printscreen/RZS

According to regional data, the highest prices for new apartments were recorded in Belgrade districts, where the average price in urban areas decreased by 0.6% compared to the second half of 2022, amounting to 314,955 dinars per square meter. In addition to Belgrade districts, Novi Sad, Čajetina, the Medijana area of Niš, Vrnjačka Banja, and Sokobanja stand out. The average area of sold new apartments was 55 square meters.

The use of text and/or photos/videos, in whole or in part, is prohibited without indicating and linking to the source and author, in accordance with the terms of use of WMG and the legislation on public information and media.

Bonus video: 03:30 HIGH REAL ESTATE PRICES LESS INTERESTED IN PURCHASING! Rabrenović for Kurir TV: (Espresso).