Serbia’s EU admission process to cause real estate price increase

Even with the current crisis, in the upcoming years, the real estate market in Serbia could become the most remunerative for investing based on the experience of the countries which during the previous decades have been undergoing the joining process and became EU members.

Statistical data of the well-known European financial institutions show that the EU joining process definitely leads to square meter price increase. Therefore significant changes at the local real estate market are expected.

The official data of the Republic Statistical Bureau and the Serbian Chamber of Commerce speak for the fact that real estate prices in Serbia, especially in Belgrade, are at the lowest level since the nineties of the last century.

Prices fell by some 5% only last year and some indicators show a fall of even up to 15%.

The European Statistical Bureau (Eurostat) data clearly show what Serbian capital market can expect in the upcoming years which will be focused to the joining process and EU membership.

Katarina Steiner from the Foreign markets research Department of the Austrian national bank analyzed these information and came to the conclusion that real estate prices were constantly increasing in the central and southeast European countries which underwent the joining process to the EU and became members.

According to her analysis, that growth was affected by foreign investments inflow, increase in citizens’ income and more available real estate loans.

Real estate market trend, before and during the first years of joining EU, was especially interesting for Croatia so Zagreb-based Economic Institute dealt specifically with this top in a special study.

Senior scientific associate of this Institute, Zeljko Lovrincevic, concluded that all new EU member states after joining the Union, generated real estate price growth of 25,7% at the national level of 25,7% at the national level and 26,9% in capitals.

- The most dramatic increase, higher than 40%, in 2005 new EU member states was recorded in capitals of Poland and Latvia while when it comes to the national level, the highest increase at the year of joining EU was in Estonia and Poland T (28,9% i 34,7%) – Lovrincevic said.

Head of the Department for Macroeconomics of the Basel – based bank for international settlements (BIS) Dubravko Mihaljek, analyzed southeast Europe real estate market trends and concluded that real estate and land value in the regions which attract potential buyers increased even before the arrival of foreign buyers of real estate.

Dusan Mramor from the Faculty of Economy of the University of Ljubljana forecasts that in future, even with all world economic crises challenges, southeast Europe countries will most likely offer growth above the average compared to developed countries.