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What has happened? In the first quarter of 2023, the real estate market recorded a drop of about 25 % in the total number of conducted sales, compared to the same period last year.
Quote. “For now, based on our analyses, the decline is more pronounced in the segment of sale of older apartments, while it is much milder in the segment of new apartments. One of the most frequently asked questions is – when will real estate prices drop?” says Miloš Mitić, executive director of the City Expert real estate agency.
Analyzing the current situation in the real estate market, he points out that after the growth of interest rates came a period of market cooling down.
“The reasons for this are many. First of all, there was the pandemic-induced crisis, then high inflation and then the recession. Due to high inflation, the European Central Bank implemented restrictive monetary policy measures, which led to an increase in the Euribor and by that, higher interest rates on mortgages. Thanks to these measures, Euribor continued to grow which has significantly affected the loan instalments and thus reduced the demand for housing loans,” Mitić adds.
Exact numbers. The share of real estate purchased on credit amounted to 30% of all sales, while last year this share fell to 20%.
Quote. “If we look at Belgrade, which is generally the most sought-after location, the average prices of new apartments ranged from 2,500 to 5,000 euros per square meter in the central municipalities and from 1,000 to 2,000 euros per sq. m in the peripheral ones. Prices of new apartments are slightly higher than those in older buildings, which resulted in the demand being higher in the new apartment segment, primarily because new buildings very often meet the needs of the contemporary buyer (garage, various amenities). Also, the first-time buyers are entitled to a VAT refund, which is an important factor”, Mitić points out.
Source: Serbian Monitor
Photo by Kalman Nemet on Unsplash
