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Serbia, With amendments to the planning and construction law is coming more land for construction?

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It is estimated that 5,000 locations could be „freed up“. – In 12 years, the state received 3.6 billion dinars from the conversion fee

Amendments to the Law on Planning and Construction, which reached the assembly, foresee the abolition of a special law (lex specialis) on conversion. More precisely, the Law on converting the right of use into the right of ownership on construction land for a fee. The repeal of this law is not complete, but the obligation to pay for conversion will continue to be held by persons whose position will be determined by special laws.

These are sports clubs and associations, housing and agricultural cooperatives, as well as persons to whom annex G on succession applies. The proposer, namely the government, that is, the Ministry of Construction, Transport and Infrastructure, states that in proposing the repeal of the Law on Conversion, they were guided by certain indicators.

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Namely, it has been estimated that this change will enable the “release” of the appropriate amount of construction land for construction, which could potentially lead to the construction of buildings with an area of ​​about 15 million square meters in the long term.

It was established that there are currently 5,000 such locations on the territory of Serbia, that is, that in case of construction, 5,000 construction permits and the same number of usage permits will be issued. The forecast is that around 300,000 construction workers would be employed at the construction sites that will open as a result of the repeal of the Conversion Act. By the way, the value of income for conversion, which was realized on the basis of compensation in the period from 2010 to the end of 2022, is 3.6 billion dinars.

The proposer of the amendments to the law states that the movement of macroeconomic indicators, especially in construction, indicate the need to undertake systemic measures that will improve the general environment in the field of planning and construction. It was concluded that the amendments to the law will have a positive effect on the further progress of the construction industry, which is one of the main drivers of economic and economic development.

The decline in the construction industry in the previous period, described through the decline in the value of construction works, directly affects the decline in the contribution of the construction industry to Serbia’s GDP. Not only this change but also others can reverse the negative trends in this economic branch. In 2022, the cumulative value of completed construction works declined. On buildings, the drop is 11.6 percent, and on other buildings, 11 percent. The total value of the works performed in 2022, expressed in constant prices, decreased by 11.2 percent compared to the previous year.

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Observed according to the type of buildings, the value of the works performed on buildings recorded a decrease of 11.6 percent and on other buildings – roadways, pipelines, complex industrial buildings and the like by 11 percent in constant prices. In the fourth quarter of 2022, construction activity, compared to the same period of the previous year, decreased by 0.1 percent in current prices, while in constant prices it decreased by 13.7 percent.

The price Index of construction materials, which is used as a deflator of value in construction in the observed period, is 115.7. The value of construction works expressed in constant prices is lower by 14.2 percent on other constructions, and on buildings by 12.8 percent compared to the fourth quarter of 2021.

In the fourth quarter of 2022, construction activity declined in all regions. In Belgrade, the largest decline in construction activity was registered by 30.9 percent in constant prices compared to the same period last year. The biggest drop in value was in the buildings of the traffic infrastructure, because the modernization work on the Belgrade – Stara Pazova railway was completed.

As a reminder, since the second half of 2017, the indices of the value of construction works have been on the rise. After the standstill caused by the corona virus pandemic, the value of the works performed in 2021 increased again. In addition to large infrastructure projects in 2021, there was also very intensive construction of residential and non-residential buildings. The annual growth rate for brackets was 17 percent, and for other buildings 19.6 percent


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