Over a period of 2003-2008, sales prices have marked a steady growth across the country.
The residential market seems to be on the slow road recovery after 2 years of weakness, but values are still 30% of the 2008 peak and demand is still fragile.
Experts note that the growth has been driven by two factors: the reintroduction of subsidized government housing loans and more realistic apartment prices following the economic crises. There is a new willingness from landlords to meet buyers’ demands on asking price, sometimes by 15-20%, stating that from 2008, residential real estate have decreased by a third.
According to current government plans, 10,000 low cost apartments will be constructed in Beograde, Novi Sad, Kragujevac and Nis. The state will additionally subsidies the interest rate on purchase loans by up to 7%, leaving buyers with an interest rate of as little as 2% on these loans. This year’s budget has 2 billion dinars allocated for this purpose. The maximum will range from 695 € to 1,595 €/m2 depending on the city and the zone. Also the government introduced a special program to support the construction industry in June 2010. The program is designed to assist construction of residential buildings where construction companies will be offered loans in dinars, without foreign currency clause, with a repayment period of 5 years, at an annual interest rate equaling the National Bank of Serbia’s reference rate plus 2.5%.
The following table shows the average prices of real estate in major Serbian cities. Prices are euro/m2 (euro per square meter).
Source: Colliers International
According to CB Richard Ellis analysis the average prices of new apartments in Belgrade reached EUR 1,730 per sq m in 2008 (includes the price of construction land, construction costs and additional costs). In the beginning of 2009, turmoil on the financial market reduced the asking prices by 10-15%. The real estate on locations in New Belgrade, Vracar, Stari Grad, Senjak and Dedinje still continued to attract bigger portion of potential buyers.