Photo: PixabayIs the sky the limit for apartment prices, interest rates, and housing loans? What is happening in the real estate market, why will the roof over your head be more expensive this year for those who are just buying it, but also for those who have already bought it on credit? How long will the increase in the price of square meters, interest and installments last?
Nebojša Nešovanović, director of appraisals at CBRE, says that apartment prices are not expected to drop, but a drop in supply is expected in the near future. On the other hand, we should not expect stabilization of inflation before 2024, and thus neither should Euribor. Is there any good news?
On the example of a loan of 30,000 euros, you can see how the installments moved for those who repay the loan in euros with a variable interest rate. In January, their installment was 121.46 euros, and in September 150.81 euros. The difference is, of course, more dramatic for those who took out a larger loan, for example of 100,000 euros. The installment jumped from 404.86 euros in January to 502.71 euros in September.
The guests of the "Oko" show could not give optimistic forecasts for those who are trying to buy a roof over their heads, as well as for those who pay off loans with a variable interest rate.
Zoran Petrović, the chairman of the Executive Board of Raiffeisen Bank, says that there is no end to the rise in interest rates, but that they will continue to rise for the time being. The biggest problem, he points out, is inflation, which is over 10% in developed countries.
"The result of that is the tightening of monetary policies, which has just started." The ECB lags behind the US Federal Reserve. The ECB had a reference interest rate of 1.25, and it is estimated that in October the base interest rate will already be two percent," said Petrović.
He says that the fact that loans were taken with a variable interest rate is now being paid. One of the ways to withstand the increase in installments is to extend the repayment term to five years, which is one of the options that the National Bank of Serbia has made possible before.
He points out that the current problem must be solved from outside and that is why we are interested in what the European Central Bank is doing. Petrović also points out that it is good that the NBS leads a monetary policy of a restrictive nature, which increased the reference interest rate, just as the American FED and ECB do.
WHAT IS HAPPENING IN THE REAL ESTATE MARKET
Nebojša Nešovanović explains that the economy functioned well in the previous period and that capital was accumulated. In order to save it, apartments were bought for cash - second, fifth, tenth.
"There was hyper-liquidity, there was a lot of capital that had nowhere to be spent, and inflation is eating it up." They wanted to preserve it because real estate has a traditional growth. We can expect a continuation, but nowhere near as in the previous period," said Nešovanović.
He points out that due to changes in the monetary market, it will be more difficult for investors to take out a loan for real estate construction, which will affect the supply in the years to come. That is why real estate prices are not expected to fall - possibly in smaller areas and near cottages.
Nešovanović points out that the problem is with those who buy their first apartment on credit and that some things need to be solved systematically.
"We have a great market for those who build, but the problem is social - young people who want to start a family will find it difficult to buy an apartment and they can move out and go somewhere where they can buy a roof over their heads." We have to build more so that young people have a roof over their heads and stay here," he said.
Nešovanović also notes that the rise in real estate prices in our country is not related to the arrival of Russians because they do not buy apartments in large numbers.
WHAT ARE THE ESTIMATES, HOW MUCH WILL EURIBOR GROW
Milan Nedeljković, dean of the Fefa faculty, explains that if you have a loan with a variable interest rate indexed to the euro, that variable component is Euribor.
"Then I'm interested in what level it is, not the interest rate on the Serbian interest market." If the ECB raises the interest rate, everything goes up. The ECB is lagging behind with aggressiveness, with interest rates, so the installments will be even higher: the ECB will have a more aggressive monetary policy, the Euribor will rise and the interest we pay will rise," said Nedeljković.
He adds that the projections show that it will grow next year as well and that it will stabilize only in 2024.
Zoran Petrović states that central banks come out with forecasts more often and revise them.
"Some forecasts say that at the end of the first quarter, we could see the ECB interest rate at around three percent, now it is at 1.25 and record a stable situation there... In the next few cycles, inflation will grow and as long as it grows, the central bank will increase interest rates," Petrović said.
WHAT IS THE TASK OF THE NATIONAL BANK OF SERBIA
Nedeljković points out that the first challenge of the NBS is to stop inflation, but also to ensure financial stability, which it is doing. When it comes to loans in euros, the NBS has no influence.
"The NBS controls the part related to the dinar interest rate, it has no influence on the European interest rate," said Nedeljković.
However, there are ways in which it can affect credit - by tightening the requirements for obtaining credit.
On the other hand, by suppressing inflation, the bank helps those who repay the loan - their installments are higher, but prices are under control.
"If the bank can control prices, manage expectations, and give a signal that it will do everything it needs to stop inflation, then I can service the war without entering into the danger of poverty," says Nedeljković.
In the third quarter of this year compared to last year, there was a 27 percent drop in demand for housing loans.
Source: rts.rs
