In Niš, compared to the pre-COVID-19 pandemic period, there’s been a 50 percent increase in building construction. While citizens mention that new construction sites are cropping up everywhere, recently noticeable are the emergence of “megaprojects,” which, according to some investors, are too large for a city the size of Niš. These developments will consist of buildings housing between 200 to 450 apartments. The price per square meter in these buildings ranges from 1,800 euros up to 2,200 euros in certain structures.
Investors have noted an increase in construction and demand for new apartments in the last two to three years. However, both investors and real estate agents have remarked on the current stagnation in demand.
“There’s a lot of construction, whether it meets market demands is the question. There are many investors, many people who have entered private investments. For a while, it was a booming business; two or three years ago, everyone rushed to invest, but now that demand has fallen, I expect it to slow down,” stated Niš-based investor Rodoljub Deljanin, currently working on two projects totaling 20 apartments in the broader city center, speaking to Euronews Serbia.
Bogdan Tripković from a Niš-based real estate agency told Euronews Serbia that construction is happening extensively in all parts of Niš, but it’s most prominent in Pantelej.
“These are buildings with six or seven floors, and the price per square meter is around 1,500 or 1,550, making it somewhat affordable because the city center is unimaginable, going for over 2,000 euros. Construction is happening in the center, in Dušanova Street, with three or four enormous ongoing projects, but prices there range from 1,800 up to 2,200 euros in certain buildings,” Tripković said.
He mentioned that building construction in Niš has increased by 50 percent compared to the pre-COVID-19 pandemic period, but they’re dissatisfied with sales, which have decreased by 30 percent.
“Will there be a drop in square meter prices?”
Slaviša Pešić, owner of a real estate agency in Niš, told Euronews Serbia that the increasing construction activity is a positive development. He believes that the quality of construction has improved due to increased competition.
“The supply of old apartments is almost nonexistent. When owners of old apartments sell and need to buy a property for themselves, they face uncertainty about whether they can afford something with the money they receive. That’s why we often see old apartments advertised at prices almost equivalent to newly constructed ones. This complicates the process, causing a slowdown in sales, as noted by the relevant cadastral service. The market cannot withstand this price surge,” Pešić explained.
Regarding new construction, he mentioned that the supply is increasing.
“Most investors sell independently, with fewer real estate agencies involved in these transactions. However, it’s beneficial that there’s a lot of construction because it increases options for people to buy property. Major investors strive to remain competitive, setting prices that align with the offered quality. Conversely, smaller investors sometimes wait for buyers, aiming for higher prices than the market can support. The future trajectory of this situation depends on numerous factors within the country and its surroundings,” Pešić stated.
He considers the pause in price growth a positive development.
“There was a certain inertia – a neighbor sold for this much, so my apartment is worth more. However, the market lacked buyers willing to pay those prices. Thus, a correction of these inflated prices is necessary. Whether prices will fall doesn’t seem imminent now. What’s being corrected are the advertised prices that were never achieved. If someone wants to sell now, they can’t set an exorbitant price; they must be aware of what’s feasible in the market,” Pešić expressed.
What are the predictions of agencies and investors for 2024?
A survey conducted by the specialized real estate advertising site 4zida among owners and employees of 85 agencies and 19 developers constructing apartments in Serbia revealed that 59 percent of agencies anticipate price stagnation, while 37 percent believe that prices will decrease.
The investors are almost unanimous on this matter, with as much as 94% believing that apartment prices will stagnate, while only 6% believe that prices will decrease.
Both parties consider economic instability in the country and globally as the most significant challenge in business. Following this concern are lending conditions and inflation, while investors are also worried about the lack of workforce.
The overall real estate market projection, however, remains positive. Most of the surveyed agencies and investors believe that their incomes will either remain at the 2023 level or increase.
The majority of surveyed agencies highlight three main factors that affected their business in 2023 – unfavorable lending conditions (62%), reduced demand for real estate (51%), and uncertain geopolitical situations leading to increased client caution in property transactions (39%). Other cited factors include clients waiting for price drops and delaying purchases.
Investors similarly cite unfavorable lending conditions as the primary impact on their operations (74%). This is followed by increased construction material costs (37%), unfavorable geopolitical situations (26%), and reduced demand for new construction (21%). They believe that collectively, these factors contribute to increased client caution in planning real estate transactions.
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