The real estate market is expected to calm down with much milder growth or even stagnation in prices
Despite the increase in the price of construction materials, construction activity is not declining. Housing is growing, but so are housing prices. Since the beginning of the year, newly built apartments in Belgrade have risen in price by an average of nine percent, and in Novi Sad by 16 percent. According to the data of the Republic Bureau of Statistics, 2,743 building permits were issued in March, which is 35.2 percent more than in the same month last year. The largest number of issued permits, 76.2 percent, refers to buildings.
According to permits issued in March, 4,360 apartments have been reported for construction in Serbia, with an average area of 70.7 square meters. The estimated value of new construction works in March is 80.8 percent of the total estimated value of works, and the largest construction activity is expected in Belgrade. At the same time, in the first quarter of 2022, the number of sales contracts increased by 6.7 percent, compared to the same period in 2021.
According to the data of the Republic Geodetic Authority, in the first quarter of this year, compared to the same period in 2021, the number of sales in Belgrade increased by 489 contracts (6.6 percent), Novi Sad by 332 contracts (13.7), Nis by 176 contracts (20 , 5) and Kragujevac for 65 contracts (11.1). The value of the purchased real estate is 1.6 billion euros, which is 22 percent more than at the beginning of last year. The largest share in the total money transactions had the turnover of apartments in the amount of 889.5 million euros, of which 562.5 million euros were set aside for apartments in Belgrade.
In Belgrade, the average price of apartments in new construction increased by nine percent, and the range ranged from five percent in Vozdovac to 28 percent in Palilula. But the value dropped by three percent in Zemun and by five percent in Cukarica. The average price at which apartments in the Old Town were bought in the first quarter was 3,000 euros, where there is a trend of price increase of 14 percent. The average price per square meter in Vracar was 2,228 euros, in New Belgrade 2,357 euros (increase of seven percent), while in Palilula the square jumped to 2,553 euros. In Čukarica, the average price per square meter is 1,595, and in Zemun, 1,755 euros.
In Novi Sad, the value of newly built apartments jumped the most, by 16 percent, so the average value per square meter was 1,505 euros, and in Nis and Kragujevac around 1,000 euros, with a jump in prices compared to last year by two or two five percent.
Nebojsa Nesovanovic, Head of Assessment at CBRE, the world’s leading companyin real estate, he says demand is dictating prices, but the market is expected to calm down with much milder growth or even price stagnation.
– Demand is currently strong and hence the pressure on prices, but it will be maintained in the short term. We expect that with the financial and real estate market, it will calm down relatively quickly and that the pressure on prices will be less. The calming of apartment prices is not related to the real estate market, but to the financial market and the economy. The only question is how much the measures of the ECB and the Fed will spill over to the real sector – Nesovanovic believes.
The current strong dynamics of demand is accompanied by building permits and investor interest. They are still interested in investing.
– The mood of investors is good and they have not yet recognized the problem of rising interest rates and changes in the financial market as something important. Construction materials have become more expensive, but real estate sales prices have jumped significantly. As for the prices of steel and iron, we saw what we could see the worst and now the prices will stabilize quite a bit and enter a calmer period – says Nesovanovic, Politika writes.
