The real estate boom in North Macedonia has driven up prices to unprecedented heights.

In Macedonia, more and more people are turning their attention to real estate investments to preserve the value of their money in the face of high inflation and financial uncertainty, which is driving up prices in the capital Skopje. With the devastating impact of inflation on savings, real estate investments have become a preferred alternative.

High prices do not have a negative impact on the demand for new buildings in Skopje, which has become an attractive destination for investors and those wishing to purchase homes with long-term security and value, real estate experts said at the Real Estate Conference held in Skopje in May. "The demand for apartments in Skopje is really high, it's a complex issue,"''comfort, but the minimum starting price is 1,000 euros per square meter.

The Central Bank of North Macedonia has reported a significant increase in the house price index for 2022. The index showed a record increase of almost 21%, which is the highest annual increase since 2008. Compared to 2021, 2020, 2019 and 2018, the annual increases were 11.2%, 1.8%, 3.5% and 1.6% respectively - although when inflation is factored in, house price increases in 2022 appear much more modest. Overall for 2022, average inflation in Northern Macedonia was 14.2%, up from 3.2% in 2021. Inflation has slowed since then, falling to 13% in April 2023. The central bank recently forecast inflation to slow to 8-9% this year. The decline is due to the assumption of lower prices''on energy and a gradual easing of price pressures in the food sector.

Saso Cvetkovski, head of housing at Fortonmka, said that based on the company's analysis, a slight decrease in demand can be expected in the near term, especially with the introduction of tighter monetary policy and higher interest rates. In May, the Central Bank of North Macedonia (NBRM) raised its interest rate by 0.25 percentage points, to 5.75%.

Because of the underdeveloped local capital market, Macedonians have few alternatives for investment. Ivanovski said that looking at the current global situation, which includes factors such as inflation and financial''instability, it is evident that Skopje residents are becoming more cautious about their finances. This is illustrated by the significant number of household deposits in local banks. According to the latest data from the central bank, household deposits totaled 329 billion dinars (5.3 billion euros) at the end of April, up 8.3% year-on-year. However, despite the growth in deposits, savings are gradually being squandered due to inflation and there are also concerns about the safety of the banking system. According to Ivanovski, the collapse of local bank Eurostandard, as well as the failure of banks to properly compensate depositors through inflation by raising interest rates, especially''has contributed to an increased propensity to invest in real estate.

Fatmir Etemi, owner of ZSF KOM, drew attention to the problems of builders, such as the rising prices of construction materials and long procedures for obtaining permits and delays in urban planning. Martin Panovski, architect of the Grand Skopje project, emphasized the changing building standards around the world, especially with regard to energy efficiency. He noted the importance of establishing a certain standard in North Macedonia that is in line with global practices. On the other hand, the adoption of the Law on Construction Land in 2008 stimulated investment by allowing foreign citizens and companies to directly own land for construction in North''Macedonia.