Builders advice: rent an apartment or invest in buying a property?

On the one hand, tenants do not benefit from high rent payments, while potential buyers find it more expensive to borrow due to rising interest rates and Eurobank, and the cost per square meter increases.

Professor of the Faculty of Economics Ljubodrag Savic notes that when you take out a loan, you buy an apartment that you will own, while as a renter you just pay for living in that apartment, but you do not become its owner.

Real estate consultant Katarina Lazarevic

says that the right choice between buying an apartment on credit or renting depends first of all on whether the buyer has a steady income, i.e. whether he has a stable job and''a good salary is a prerequisite for getting a loan. "Banks are very strict, they have certain standards that must be met when giving a loan, but I always advise to take a loan, take an amount of 20 percent as a down payment and buy an apartment. Because paying rent, which is now about 500 euros for a very small apartment, you get nothing. The rent will go up, the loan payments will also go up, but you will still have the apartment on a long-term basis," advises Lazarevic.

Potential buyers are paying attention to banks' decisions regarding interest rates. A few days ago, the European Central Bank held interest rates after 10 consecutive''raises. Savic says he is not surprised by the decision, but believes it is just a psychological break to calm down the citizens, the borrowers and the economy. He's not sure there won't be more interest rate hikes. "The reason is that inflation, which is the main reason for base interest rate hikes, is high, and the impression is that despite its decline in Europe and Serbia, this will be a long-term trend. So far, inflation is threatening, which is not only an economic phenomenon, but also the result of events that are happening in the world right now. Many people are talking about potential world conflict, and it is clear that inflation is most fed when there is uncertainty in society or in some societies, and we are living in such times,'''which is more profitable - buying or renting. "A person can take out a 15-year loan, find out the effective interest rate, and calculate how much it will cost. That means not only the amount of the loan he took out, but also the interest he will have to pay, divide by the number of months and get the monthly payment for the whole time period. And compare that to the rent that will have to be paid," emphasizes the economics professor.

But perhaps even more important to stay, as mentioned, when considering credit. "Right now, it seems hard to expect a Eurobank cut anytime soon. Then also an interest rate cut. But the most important thing is for everyone to seriously consider whether they will have enough money. And, even more importantly, whether he will have''work. We live in a time that is completely uncertain.

What we have learned from previous crises

He says that some take loans lightly and cites the example of 2011, when those who took loans in Swiss francs faced a drama, and says how it would have been resolved if there had been no state to intervene, and the question is whether it was necessary. "People have to weigh very carefully the solution, which is the best for all people except having children, but after a while it can become a nightmare, how many people have gone back to the countryside, how many people have sold apartments, moved into some kind of small apartments,'''said Savic.

Lazarevic says it is unrealistic to expect prices to return to previous levels. 'Prices are partly back, lower than they were, but far from matching our incomes. There are still Russians and Ukrainians, but their numbers are unknown. They just come and go, they don't stay long, but the facts are that they are the best tenants because they pay much more than the market value," says Lazarevic.

They've turned their attention to the economic crisis of 2008, and Savich says we haven't learned anything from it. "People need to be as cautious as possible. On occasion, I'm going to change my car these days. And I think I know a little bit about this problem. I'm completely confused. There's no more credit available. I'm comparing it to the price''A car that was bought seven or eight years ago, when it was much more favorable than it is now. Now all loans are unprofitable. You have a fixed rate in dinars, but the effective interest rate for a car loan is 9.4 percent. You give for a loan of 10,000 euros 3,500 in interest. It's the same with home loans. They are basically the same loans. Apartment loans are a little more favorable, but mostly the loans are unprofitable,' he told his example and doubts about car loans.