PRReal Estate Sales in Serbia: Trends and Challenges in 2023 | Society and Economy | PR

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In the first quarter of this year, real estate sales in Serbia decreased by as much as 8,000 compared to the last three months of 2022. However, this drop in sales has not significantly affected the overall value of real estate in Niš and Novi Sad, as prices continue to rise.

According to data from the Republican Surveyor's Office (RGZ), the total volume of real estate transactions rose by 2.6% to €1.6 million. The principle of supply and demand has an impact on real estate prices. Currently, real estate prices are stagnant due to a quiet market due to annual vacations and a difficult financial situation. However, prices are not expected to fall.

Investor interest is down 20% year-on-year. The principle of supply and demand plays a key role in shaping real estate prices. When supply is lower, real estate prices can't go down. This means that within a year there will be fewer new apartments on the market than there are at the moment.

Belgrade is leading in terms of real estate prices. As much as 66% of the money spent on buying real estate in Belgrade. According to RGZ data, the prices of apartments in houses under construction in Belgrade increased by 20%, while the prices of apartments in new buildings increased by 14% year-on-year. The average price per square meter is 2,465 euros. The residential complex Belgrade on the Water and the Novi Dorčol neighborhood are the most sought-after apartments for sale in Belgrade, with the Novi Dorčol neighborhood having the highest average price per square meter of 4,300 euros.

How is buying real estate in Serbia financed? When it comes to the types of real estate that are most often bought using a loan, apartments come first, and a little less in the case of, for example, house sales in Belgrade. In the first quarter of this year, 18% of all apartments sold in Serbia were paid for with credit funds. However, that number is down 10% from the same quarter in 2022.

The question that arises is where does the money to buy real estate come from? The facts show that lending is less popular compared to the previous year, but still plays an important role in the process of buying apartments and houses in Belgrade. Reducing the share of loans for real estate purchases. The share of loans in the purchase of real estate decreased from 28% to only 18% due to high interest rates.

In Belgrade alone, in the first quarter of 2023, the total amount of money that circulated in the real estate market amounted to 828.4 million euros. This is an increase compared to the same period of the previous year, when the amount was €813 million. Data collected from sales contracts shows that in the first quarter of 2023, only 7% of properties were paid for with loan proceeds.

This number is down 5% from the same period of the previous year.

The impact of legalization on the real estate market. As long as demand exceeds supply, you should not expect real estate prices to drop. However, speeding up the legalization process could make a difference. If only 10% of the properties awaiting legalization are available on the market, the supply will increase by about 200,000 apartments. Although the new legalization law was announced long ago, it is still not on the parliament's agenda.

When is the best time to buy real estate in Serbia? Serbia always offers lucrative real estate investment opportunities, given their high potential for profit. However, it's important to consider a few key factors to make the right buying decision. The first step is to carefully analyze your finances. It is advisable to carefully write down and estimate how much money you can actually invest. This way, you will get a clear idea of the amount available to you.

An overview of financial options and credit options. If you're short on money, don't worry. Research the terms and conditions of loans from banks and pay attention to the current interest rates. Keep in mind that interest rates and euribor are currently quite high, which may influence the decision of some potential buyers to postpone the investment. However, don't let this discourage you, especially if you plan to repay the loan in a short period of time. This way, you will save a significant amount on interest and your investment will be even more profitable.

Evaluation of the investment in relation to rental income. If you are considering buying a condo as an investment, it is important to consider the ratio between investment and rental income. Any investment that pays off in less than 20 years is considered a good investment. However, keep in mind that not every location is equally favorable for investment. However, given the current development of the city, we believe that regardless of the location you choose to buy an apartment in Belgrade or anywhere else in Serbia, you will not make a mistake.

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