Serbian President Aleksandar Vučić has announced new state assistance for young citizens to help them buy their first apartment. The program, which will be available to Serbian citizens aged 20 to 35, offers subsidized housing loans with favorable terms, including installments for the first year costing under 100 euros.
Details of the program
Under the new initiative, young people will be able to purchase apartments with state subsidies. The properties eligible for purchase include registered buildings, whether they are old, new, or under construction. Specifically, apartments within buildings funded by banks or the Republic of Serbia, as well as those within ongoing construction projects that are over 60% completed, will be eligible. The program also covers properties within state-supported construction projects for certain categories of individuals.
The program defines residential real estate broadly, including houses, apartments, parts of residential buildings, garages or parking spaces (if attached to an apartment), and even land with a building permit for residential construction.
Property price limits and loan terms
The program sets maximum price limits for properties in various cities. In Belgrade, the maximum price per square meter is set at 2,200 euros, while in Novi Sad it is 1,800 euros, Niš 1,500 euros, Kragujevac 1,400 euros, and other areas 1,300 euros. The maximum value for real estate under this program is capped at 100,000 euros.
The minimum down payment required is just 1%, with loan repayment terms of up to 40 years, with the loan period ending when the borrower reaches 70 years of age. The accompanying costs of the loan are capped at 1% of the approved loan amount, and early loan repayment will be penalty-free. The government will also provide a 40% guarantee on the loan until the tenth year of repayment.
Subsidized interest rates and real estate types
Vučić explained that the government will offer highly favorable interest rates. For example, during the first year of the loan, the interest rate will be set at 3.5%, with a state subsidy that reduces it to just 2%. From the second to the sixth year, the interest rate will drop further to 1.5%. Vučić emphasized that this level of subsidy is virtually unheard of globally.
The program is designed to be flexible in terms of the type of property eligible for purchase. Young people can buy houses, apartments, or parts of residential buildings, as well as garages and parking spaces if they are sold together with the apartment.
Vučić noted that the state will limit subsidies to ensure they are not used to finance luxury properties. For example, the program will provide subsidies for apartments up to 2,200 euros per square meter in Novi Sad, and 2,600 euros in Belgrade.
The program will also offer flexibility for smaller apartments. “If someone wants to buy an apartment of 40 square meters, let them buy it,” Vučić said, acknowledging that smaller apartments are suitable for young people buying their first home. He also mentioned the possibility of increasing the maximum subsidy to 120,000 euros, especially in Belgrade, which could help more young people access larger apartments.
Addressing concerns about property size
Responding to concerns about the affordability of apartments in Belgrade, Vučić pointed out that while the price per square meter may seem high, smaller apartments of around 50 square meters can still offer good value for young people buying their first property. “I lived in Block 45, and I don’t think it’s a hole. It’s a first apartment, a step toward independence,” he said. He also indicated that the government may consider increasing the subsidy cap to 120,000 or 130,000 euros to ensure more young people can access suitable housing.
Next steps and timeline
In January 2025, the National Bank of Serbia is expected to adopt the necessary regulations to support this program, and the law is set to be presented for parliamentary approval. The program is expected to begin on March 1, 2025, giving young people a unique opportunity to purchase their first home with state support.