Photo: belgradewaterfront.comIn the second quarter of this year, apartment prices in Belgrade increased by up to 24 percent in certain municipalities, while the trend in the rest of Serbia is below twenty percent. In the coming period, a smaller supply of apartments can be expected, which certainly won’t lower prices. The European Central Bank started raising interest rates in March in response to rising inflation. Rising interest rates make borrowing through home loans less attractive, both for investors and real estate buyers.
Nebojša Nešovanović, from the international real estate consultancy company CBRE, says that loan prices have risen and demand for them has fallen. There is significantly less money available.
"I expect that in the coming quarters there will be a decline in trading on the real estate market." On the other hand, I would not expect a drop in apartment prices in Belgrade because there is no more speculative construction and everything that is built is sold before construction reaches the roof. With a lack of money, new construction will stop, and that is a problem for both the economy and the real estate market. Investments that have received project financing so far will be built, but most of them have been sold. We are getting into a problem because new, large residential complexes will not be built. Smaller projects that can be financed from pure capital will be carried out," assesses Nešovanović.
It would be better, he says, if we had a capital market so that speculative capital would escape from real estate. Everyone in the real estate market wants some stability.
"When prices skyrocket, it attracts people who are not from that industry, they don't know what they are doing in general, and they create a problem for someone who knows what they are doing and is not ready to accept some risks," emphasizes Nešovanović.
The total number of sales on the real estate market in the second quarter of 2022 was one percent higher than in the second quarter of 2021. According to the data of the Republic Geodetic Authority, there was an increase in the number of sales in Novi Sad by 83 contracts, in Belgrade by 398 contracts and in Kragujevac by 51 contracts, while in Niš there was a decrease by seven contracts. In that period, two billion euros were invested in the purchase of real estate, which is 27.5 percent more than in the same period last year. More than one billion euros were invested in apartments, out of which 712 million euros were invested only in Belgrade. Apartments in Savski venac, New Belgrade, Dorćol and Vračar are being sold without any problems, where the square meter costs several thousand euros, and that while they are still under construction. The most expensive square meter apartment in Serbia in the second quarter of this year was traded in the location Belgrade Waterfront, in the municipality of Savski venac, and it cost 9,545 euros per square meter, the area is 97 square meters, and it is an apartment in a new building. The most expensive house was sold in Savski venac for 2,900,000 euros, Politika writes.
Nenad Đorđević, president of the Management Board of the Real Estate Cluster Association, explains the increase in real estate prices by the fact that traffic is increasing. The demand for real estate is always at a higher level in times of crisis, because capital goes to gold or to real estate.
"The increase in interest rates will not leave mark because in our market last year, about 32 percent of apartments were bought with loans, and only 14 percent of all properties were sold to loan buyers. This year, that number fell to 12 percent, and turnover increased because cash generates demand here. Money generally does not flow from real estate, because when they sell - people usually buy real estate further. When prices rise, buyers look to buy real estate as soon as possible, so that waiting period is shortened and traffic increases," says Đorđević and emphasizes that one loan has a multiplier effect of three to four, that is, one loan finances the purchase of three or four more properties.
However, he emphasizes that it is not only loans that open the trade chain. The most important role in buying and selling is played by the withdrawal of money from savings and remittances from our citizens from abroad, and lately also the money that foreign citizens invest in real estate in our country.
Kaća Lazarević, a real estate agent, says that she sees no sign of the market calming down. There is even a noticeable increase in prices in new construction. In Cerak, the price per square meter is 2,000 euros for a building that is yet to be built.
"The move of the European Central Bank does not affect us at all. There is a lot of demand here and prices will continue to go wild. I doubt that things will calm down in the near future because there are not enough apartments, and there are many interested buyers. Oldbuilds have even begun to follow newbuilds. Small apartments are the most expensive, and lately apartments with coal and wood heating are in demand. Maybe it won't last forever, but it's a new trend," Lazarević said.
Source: politika.rs
