Why have prices stayed high for years, and can we expect cheaper square metres? Answers from Miloš Mitić, CEO of City Expert.
1. Supply and demand
When we have economic expansion, low interest rates and higher demand, prices naturally rise.
Supply is still not large enough to meet demand, especially in the capital and larger cities. Since 2018 there has been no significant fall in prices; the pandemic brought oscillation and stagnation, but the market recovered quickly. In the last year or two prices have stabilised more, as RGZ data show.
2. Material and construction costs set a higher base
The war between Russia and Ukraine and the crisis in the Middle East made materials more expensive, and property prices followed; when supply chains stabilised, prices did not come back down.
3. Luxury projects raise prices around them
There are at least 5–6 projects in Serbia priced at 5,000–6,000 euros per square metre and up, which pulls slightly cheaper properties up and lifts the whole segment.
4. Property is still among the most sought-after investments
Investment buyers make up about 20–30% of the market and more than 50% in some luxury projects: entrepreneurs, people from the diaspora, and buyers who purchase to rent out. The sharp rise in rents after the war in Ukraine began made buying to let more attractive.
5. State measures increase demand
Subsidised housing loans for young people raised demand for more affordable apartments, together with lower interest rates.
Is a fall in prices possible?
We do not expect lower prices, but continued stabilisation. A serious fall would need a much sharper drop in economic activity, rising unemployment or a significant weakening of demand.
Advice for buyers: if your conditions are good, do not wait. If you buy with a housing loan, have a stable job and savings for the down payment, buying is recommended. City Expert and Kreditni savetnik bring together everything you need: find a registered apartment in Belgrade, Novi Sad or Niš, and compare bank offers with free help from Kreditni savetnik.
