Falling real estate prices in Serbia: Is now the right time to buy an apartment or should we still wait?

The prices of square meters have fallen in all cities in Serbia, Apartment prices have fallen to the level of two years ago, Rent prices in Belgrade are falling - these are just some of the headlines that marked the media this summer and delighted potential apartment buyers and tenants.

Did both of them rejoice prematurely, where you can buy an apartment in Belgrade today for 1,000 euros per square meter, how Novi Sad came close to the capital in terms of prices, what is the trend in tourist centers - these are the questions investigated by the portal eKapija.

The report of the Republic Geodetic Institute for the first half of 2023 shows that the trend of stabilization and calming has continued after two years of extremely dynamic growth, which followed the outbreak of the corona virus pandemic. In addition to the calming of activities, the real estate market still maintains a higher level compared to pre-pandemic values, is stated.

The total amount of money used for the purchase of real estate amounted to EUR 3.3 billion, which is 81% more than in the first half of 2019 (before the pandemic) and by 7% less compared to the same period of the previous year. The total number of purchases and sales in the first half of the year amounted to 60,014, which is 26% more than in the second quarter of 2019. before the outbreak of the pandemic and by 12% less than in the second quarter of 2022.

Apart from Belgrade, a slight drop in prices in other cities as well

According to data from the specialized real estate website 4zida, the average advertised prices of apartments when it comes to sales recorded stabilization and a slight decline in the second and third quarters of this year. 4zida PR manager Aleksandra Mihajlovic tells eKapija that the average advertised price of real estate in Belgrade in the first quarter of 2023 was EUR 2,500 per square meter, in the second quarter it was EUR 2,462, while in the third it was EUR 2,433.

- In Novi Sad, a slight drop in prices is also being recorded. Currently, the average advertised price is 2,247 EUR per square meter, which is about 50 EUR less than in the first three quarters of this year. Other major cities in Serbia, such as Kragujevac, Nis and Subotica, also recorded a drop or stabilization of prices - says Mihajlovic.

Prices of new construction are mostly stable (Photo: Robert Kneschke/shutterstock.com)

The executive director of the City expert agency Milos Mitic also agrees, explaining that the slowdown in the real estate market is expected. According to him, factors such as the situation in Ukraine and the restrictive monetary policy with high interest rates have influenced the decrease in the demand for real estate. As he says, stabilization and a slight drop in prices is also observed in Belgrade, especially in certain parts of the city, primarily in old buildings.

- Currently, we are recording a price drop of about 10% in old buildings, while new buildings generally remain stable. Investors have become more cautious about the pricing policy, and oversized prices are rare. Investors who keep prices high could face slower sales dynamics - Mitic warns.

Where in Belgrade can you buy an apartment for 1,000 EUR per square meter?

However, what was a reality until just a few years ago - buying an apartment at a price of EUR 1,000 per square meter in certain parts of Belgrade, such as Miljakovac, Mirijevo, Borca - today is an abstract noun. According to our interlocutor, the price of a square meter on the outskirts of Belgrade has been significantly higher than EUR 1,500 per square meter for more than a year.

- In Mirijevo, the average price is around EUR 1,700 per square meter, while prices in Borca and Krnjaca are around EUR 1,500. In locations such as Miljakovac and Rakovica, prices are around EUR 1,800. These prices refer to new buildings, while the prices of old buildings are slightly lower, by around 10%, depending on the condition of the residential building - Mitic points out.

Anyone with a modest budget of EUR 1,000 per square meter will have to live in an old building on the outskirts of the city. Or to give up the Belgrade address and find happiness in Banovci and Pazova.

- At a price of EUR 1,000 per square meter, it is currently very difficult to find an apartment anywhere in Belgrade, even in illegal buildings. Eventually, some apartments in old buildings on the outskirts of the city, which require renovation, could come close to that price. As for new construction, the location that could be closest to that price is Krnjaca (about 1,500 EUR), or locations outside of Belgrade that are becoming more and more interesting, such as Banovci and Pazova - says Mitic.

In terms of prices, Novi Sad is close to Belgrade (Photo: photosmatic/shutterstock.com)

Aleksandra Mihajlovic also notes that for a price of 1,000 EUR per square meter you can find an apartment on the outskirts of Belgrade.

- A completely renovated apartment with an attached yard in the municipality of Cukarica, in the neighborhood of Old Cerak, is for sale at a price of 933 EUR per square meter. Also in Surcin, Zemun polje, Petlovo brdo in old buildings, you can find apartments ranging from EUR 900 to 1000 per square meter, while in Mladenovac, for example, an apartment with central heating in an old building with an elevator is sold for EUR 847 per square meter, and the price includes also a parking space - reveals Mihajlovic.

The most expensive are the Old Town and Vracar

Of the EUR 1.7 billion allocated for real estate in Belgrade in the first half of the year, the highest price has been achieved for EUR 11,475 per square meter in Belgrade on the water, while the largest amount has been set aside for an apartment, in the same complex, and amounts to EUR 2,601,888. The most expensive house has been sold in Savski Venec for EUR 4,802,000, while the most expensive parking space was paid for EUR 58,400, in the same municipality. The highest average price of apartments in new construction is at the Depo residence location in Vracar and amounts to EUR 4,440 per square meter.

As our interlocutor states, central city municipalities, such as Old town and Vracar, generally have the highest prices in Belgrade.

- The price of a square meter in a new building in these municipalities ranges between 3,500 and 5,000 EUR, with possible extremes. The price of a square meter in an old building is slightly lower, on average by 10 to 15% - says Mitic.

By the way, two-room and two-and-a-half-room apartments are the most sought-after - when it comes to old buildings, they account for 36% of the total turnover, and 28% for new buildings.

At Zlatibor, it is challenging to achieve a return on investment in the short term

The price drop was also recorded in tourist centers. As Aleksandra Mihajlovic says, in one of the most popular destinations when it comes to spas, Vrnjacka Banja, the current average advertised price of apartments on the 4zida website is EUR 1,687 per square meter, and a slight drop in prices is recorded compared to the first two quarters of this year. Cheaper than Vrnjacka banja is an old building in Sokobanja, where the currently advertised prices of apartments are around EUR 1,485 per square meter.

- Here, too, there was a drop in prices by around EUR 240 compared to the second quarter of this year. To buy a house, you need to spend an average of 430 EUR per square meter, which is about 300 EUR less than for a house in Vrnjacka banja. The average of the advertised prices of apartments at Zlatibor mountain is almost at the same level as in the second quarter and is around EUR 2,000, while at Kopaonik mountain the average prices are around EUR 2,070 and this mountain is recording a price drop compared to the first two quarters of 2023 - Mihajlovic states.

Mitic points out that the drop in prices, apart from Kopaonik, Sokobanja and Vrnjacka banja, is also noticeable at Zlatibor.

- At Zlatibor, it has become challenging to achieve a return on investment in the short term, considering the issue prices that fell below the level of return on investment within 15 years - says Mitic.

Sokobanja cheaper than Vrnjacka banja (Photo: Shutterstock/Sasa_Stojanovic)

When it comes to cities, according to the report of the Republic Geodetic Institute, the biggest drop in demand is currently being recorded in Novi Sad, but prices are still high, our interlocutor notes. According to him, cities such as Niš and Kragujevac have experienced a tendency to increase prices over the last few years, but prices have stabilized or fallen slightly due to the economic situation.

And can the prices be lowered, or do the owners really receive the requested amount, which often seems enormous to those who just start looking at the ads? A cursory look at the ads shows that the owners of an apartment on the top floor of a three-story building from 2011 in Uciteljsko naselje on Zvezdara are asking EUR 2,935 per square meter for it - without an elevator and a secured parking space. In the ever-popular New Belgrade, a 66-square-meter apartment is offered in Block 70 on the top floor of a four-story building from 1975 at a price of EUR 3,409 per square meter.

- The possibility of lowering the price in relation to the advertised one depends on the specific case. High listing prices often result in slower property sales. If the price is significantly above the real market value, it is possible to achieve a discount of even 20%, especially in the case of more expensive real estate - Mitic advises.

Renting - No more studio apartments for 1,000 EUR

And what can those who are still far from buying real estate, so they have to rent an apartment, hope for? Our interlocutor has good news for all those who are still fresh from the traumas of the recent period when owners were asking for 1,000 EUR per month for studio apartments in the center of Belgrade. The rental property market has also seen a drop in prices after a drastic increase, he notes.

- This decline and stabilization of prices are expected, considering that the situation with prices was artificially oversized in previous years. Although prices have not returned to the level of the period two years ago, stabilization can now be noticed, and extremely high prices, such as those of 1,000 EUR for studio apartments in the center, are rare - says Mitic.

Our interlocutor, however, notes that when it comes to renting out apartments in Belgrade, the average advertised prices on the website were at the same level for the first two quarters, while there was a slight increase in the third quarter.

- The average price of rent for a studio apartment in Belgrade jumped from EUR 300 in the first two quarters of this year to EUR 330 now. A similar trend is noted by other apartment structures - says Aleksandra Mihajlovic.

The question of all questions: When are prices going to drop more significantly?

If you are wondering whether to buy an apartment now or wait because, as everyone claims, prices must fall at some point, we have no good news. Our interlocutors do not want to forecast when we can expect a significant drop in real estate prices in Belgrade and Serbia. However, they do not expect an extreme drop in prices.

- Predicting a significant drop in real estate prices in Belgrade and Serbia is challenging. Currently, the real estate market and the banking sector are showing stability and resistance to economic challenges. Therefore, no extreme price drop is expected. The period of stabilization and slight drop in prices will probably last until spring, when it is expected that restrictive monetary policy measures will be lifted, the Euribor will decrease and inflation will stabilize, which could support the regrowth of the real estate market - Mitić points out.

Aleksandra Mihajlovic adds that it is ungrateful to make any forecasts, bearing in mind the complex geopolitical events both in the country and in the world.

- What is certain is that there shouldn`t be major upheavals in the real estate market, such as happened in the previous period, but prices will certainly not return to the level of a few years ago - Mihajlovic concludes.

Marija Dedić