The Serbian Parliament concluded the detailed debate on the proposed law for subsidized housing for young people. Finance Minister Siniša Mali stated that with a 400 million euro guarantee scheme, around 5,500 apartments could be financed. He began his presentation by strongly condemning the violence carried out by the opposition.
Mali further explained that the guarantee scheme could be expanded to allow even more young people to purchase their first home. He mentioned that if we consider the average price of a smaller apartment in Serbia, which is approximately 75,000 euros, the scheme could cover around 5,500 apartments.
“One of the questions raised was about the more than 200,000 students in the country. What about them? My answer is very clear: we are starting with this guarantee scheme. We don’t know how many students will apply, but students can also apply as soon as the law is published in the official gazette. Eight days after publication, the law will come into force, and they will be able to apply for these affordable loans in commercial banks,” Mali said in the parliament.
He emphasized that there is significant demand, and if more students apply, the guarantee scheme will be easily and quickly raised to allow more students to purchase their first home. Mali clarified that one of the key criteria for the scheme is that applicants must be between 20 and 35 years old, with no other restrictions. He also noted that students can apply for these loans if the law passes, by going to their commercial bank.
The finance minister explained that the loan participation rate is just 1%. “This is how we help young people buy their first property. If the average loan amount is 75,000 euros, that’s 750 euros per month. For 750 euros, you can own your first home,” Mali stated.
Regarding employment status, Mali confirmed that employees on both permanent and temporary contracts, as well as the self-employed, can apply for the loans under the program. “Employees on permanent contracts, farmers, freelancers, and self-employed artists have no restrictions when applying for these loans.”
“Employees on temporary contracts must provide a family member’s guarantee. If you’re employed on a temporary basis, your family member’s guarantee is sufficient to get this loan. Unemployed people can also apply, but they must provide a solidarity guarantee from a financially capable family member,” Mali clarified.
He also explained that the maximum loan amount covered by this program is 100,000 euros. However, applicants can take out larger loans, with the excess portion available under market conditions.
“There’s no limit on the price per square meter of the apartment. This was a frequently asked question during the initial presentation. There is no limit. The only restriction is on the loan amount, which is capped at 100,000 euros. The rest of the loan can be larger, and the price per square meter is not limited,” Mali said.
He added that the banks involved in this program are obligated to offer a 1% participation rate and a one-year grace period for borrowers. “If the borrower wants a larger down payment, that’s possible. If they don’t want to use the grace period, that’s also possible.”
The Parliament is set to vote on several legal proposals, including amendments to the Law on Higher Education and the Law on Primary Education, as well as the law ensuring support for young people purchasing their first property. Snežana Paunović, Vice President of the Parliament, announced that a vote will take place at 3 p.m. today on 34 out of 70 agenda items.
Mali also explained the loan’s interest rates: during the first year of the grace period, the fixed interest rate will be 3.5%, with a state subsidy of 2%, meaning the borrower will only pay 1.5%. “If the loan amount is 75,000 euros, the borrower will pay 93 euros in the first year,” he said, adding that the state will directly contribute 124 euros from the budget for each borrower.
“For the period between the second and fifth year, the fixed interest rate will again be 3.5%, with the same state subsidy. Borrowers will pay 175 euros, with the state contributing an additional 124 euros. From the sixth year onwards, the interest rate will be based on the quarterly or semi-annual EURIBOR plus 2%, and the monthly payments will rise to 340 euros,” Mali explained.
The repayment period for the loans will be up to 40 years, with a maximum age of 70 years at the time of loan maturity. Mali expressed hope that the members of the Parliament would support the law to fulfill a significant promise made by the President of Serbia to provide young people with affordable housing.
“We are ensuring that our youth can access their first property under exceptionally favorable conditions, demonstrating the strength of the state. This is another promise we are keeping,” Mali concluded.
