Companies operating in the domestic real estate market expect interest rates to start rising, although the National Bank of Serbia plans to keep the reference interest rate at 1 percent by the end of 2022. The central banks of the countries in the region, due to rising inflation, including the Czech Republic, Hungary, Poland and Romania, unlike the NBS, have already initiated monetary policy actions, it was assessed at the first panel of the conference dedicated to the pandemic consequences on investments in Southeast Europe.
“Obviously, it is not ideal that interest rates are rising, but it is understandable that this is due to inflation. The attached table shows that Serbia does not plan that, but in the end it will have to follow the example of more developed countries,” the head of department for investment real estate of Southeast Europe CBRE Group Uroš Grujić, said.
According to him, the business sector expects that inflation will accelerate also because low inflation lasted for almost 15 years, and that the pandemic also “gave” its contribution.
Grujić estimated that after the pandemic on the real estate market, compared to the situation during the pandemic, there will be no big negative changes.
Business in the real estate sector has slowed down in the short term, but we are on the way to returning the situation to “normal”, as it was before the pandemic, he added.
“I don’t think the pandemic has too much of an impact here in the region. Everything has stopped for a while, but things are slowly starting to return to normal, and when we compare Austria, Germany, Poland, which are currently completely closed, we’re actually functioning relatively well,” adds Grujić.
The only drastic impact of the pandemic was noticed in the hotel segment, but it does not predict a negative future either.
“Unfortunately, since the pandemic is not over yet and there is a danger of re-isolation and stagnation of the market, that means further uncertainty in the coming months,” explains Klaus Grakgaber, head of Erste Bank’s commercial housing department.
At the same time, he is very optimistic about the level of interest rates and points out that they, as a bank, do not expect large increases in the next year or two.
Inflation is relatively high in most markets and is between 4 and 5 percent, but is expected to be between 2.5 and 3 percent next year.
“The European Central Bank may want to increase interest rates, but not too much because that could cause a euro crisis, we expect interest rates to increase by 1%,” Grakgaber concluded, Nova Ekonomija reports.
