Subsidized housing loans for young people have been available for the past 20 days, with around 1,800 young individuals showing interest in securing a home. The main advantage of these loans is the reduced down payment requirement of just 1%, compared to the standard 20% required by banks.
Another key benefit is the subsidized fixed interest rate for the first six years. Clients will pay a fixed 2% interest rate, while the government contributes an additional 1.5% to the bank. After the first six years, the loan continues with a variable interest rate, consisting of the six-month EURIBOR (currently 2.35%) and a fixed margin of 2%.
A significant promotional feature is that even young people without jobs can apply for these loans, provided they have a guarantor.
This unique subsidy has drawn comparisons to the NINJA loans (No Income, No Job, No Assets) granted before the 2008 financial crisis in the U.S. However, experts believe the chances of many such loans being approved are low.
Miloš Mitić, director of the real estate agency Sitiekspert, notes that there is high demand for these loans and that banks will likely approve them for solvent clients—those with jobs and decent incomes, but struggling to meet the standard 20% down payment. He explains that interest in homes priced under €100,000 has surged, with many people looking for properties.
However, Mitić points out that there is a shortage of suitable properties meeting the criteria, particularly in central Belgrade. Properties that qualify must have a price below €100,000 and meet certain legal conditions, such as having a use permit or being financed by a bank. As a result, many applicants are turning to older properties that are registered, with new developments largely excluded from eligibility.
Kaća Lazarević, a real estate agent, adds that there is very little newly built, registered housing available within this price range in Belgrade. She notes that small apartments are rare and often overpriced compared to larger ones. Buyers are also limited to purchasing in other cities or relying on parents who can afford homes over €100,000.
Nikola Seneši, a real estate investor, suggests that the program has potential but is fraught with uncertainties, including possible risks for fraud. He highlights concerns about the pricing of property assessments, which could lead to manipulated valuations or inflated property prices. This raises fears of potential misuse, such as individuals selling properties at higher-than-market prices to young borrowers who may not be able to repay the loan.
Currently, the state-owned Postal Savings Bank is participating in the program, and other banks, including Unicredit, NLB Komercijalna, and Intesa, have joined later. However, the limited involvement of private banks suggests that there are significant risks involved in this program.
