Real Estate Turnover in Serbia

Sector On the Rise

Real estate turnover in Serbia is constantly on the rise and, with the construction of a full network, locations alongside the highways are also becoming interesting to investors

Real Estate in Serbia, Đorđe Andrić and Milić Đoković

Đorđe Andrić, Head of the Centre for the Support of Investment and Public-private Partnership

Milić Đoković, Member of the Advisory Board of the Real Estate Brokers Group at The Chamber of Commerce & Industry of Serbia

According to official data that can be accessed via the website of the  (RGZ), the value of Serbia’s real estate market in the first half of this year stood at 1.8 billion euros, with about 47,000 properties being acquired by new owners in the same period. The value of the Serbian real estate market is constantly increasing. Belgrade holds a convincing first place in terms of growth, followed in second place by Novi Sad, then Niš, Subotica, Kopaonik, Zlatibor etc.

“More than half of the money is spent on real estate in Belgrade, and that totals €995 million, which is a significant increase compared to €830 million in the first half of 2018, and next comes Novi Sad, where the market value stands at €194 million, which represents an increase of nine million euros compared to the same period of last year,” says Master of real estate management Milić Đoković, a member of the Advisory Board of the Real Estate Brokers Group at the Chamber of Commerce & Industry of Serbia. “Viewed in regional terms, 27 per cent of total trade in real estate place in Belgrade and 36 per cent in Vojvodina.”

The total value of real estate traded under sales contracts processed by the Republic Geodetic Authority is 12 per cent higher than in the same period last year, when the market had a value of €1.6 billion. “It is an interesting fact that growth of sales in new buildings increased by 13 per cent and that the difference in the price of new and old buildings is increasing,” says our interlocutor.

The most sought after and most interesting sub-segment of the market by far is residential real estate, primarily apartments. On the basis of structure, the most sought-after in Serbia are apartments (47%), which is up 14 per cent compared to the same period of last year, while the value in the apartment trade turned over 850 million, which is an increase of 75 million euros. Houses account for 13 per cent of the real estate market, while agricultural land accounts for 20 per cent of total real estate trade. The monetary value of the market in agricultural land stands at around €87.6 million, with the highest prices reached in the Vojvodina district of Bačka.

The position of Serbia, and the micro-location itself, is very good for the development of the real estate sector, and this is evident in the turnover, the realisation of sales and demand for real estate

“Tourism has great potential on our market and this sector of trade is very lively and good for development, as is the development of communal infrastructure and the creation of various shopping chains and shopping centres alongside roads,” says Đoković.

Alongside Belgrade, additional investments in the coming period are expected in the largest tourism centres, as well as in other major cities in Serbia.

“Among foreign investors, it is primarily investors from the UAE and Israel that are investing in large residential-business complexes and shopping centres in Belgrade. And investments by local investors are also significant,” says Đorđe Andrić, Head of the Centre for the Support of Investment and Public-Private Partnership. “Certainly the most attractive destination in Serbia when it comes to investing in real estate is Belgrade. Belgrade’s population is growing year on year, which creates opportunities for growth. In the last few years, nearly two million square-metres of building permits have been issued on an annual basis, according to data from the Secretariat for Urbanism and Construction Works, and on the basis of municipal and national permits, on the territory of the City of Belgrade.”

Our interlocutor adds that the development of road infrastructure is certainly having a positive effect on investments in the country’s interior. The road network has created the possibility for the arrival of new investors in the manufacturing sector in smaller Serbian towns, which leads to reduced unemployment and higher wages. In this way, through a higher standard of living for citizens in the interior, the opportunity is created for investments in the real estate sector in these towns in Serbia. Simultaneously, centres of tourism (such as Zlatibor, Vrnjačka Banja etc.) are more accessible to tourists when there is a good road network, thus leading to tourists deciding to visit these places more often and automatically impacting positively on the development of real estate.

“The position of Serbia, and the microlocation itself, is very good for the development of the real estate sector, and this is evident in the turnover, the realisation of sales and demand for real estate. Here I’m primarily referring to Belgrade as the regional hub of business for the Balkans and this part of Europe, which – with good development of transport, road and aviation networks – justifies its potential and its position. There is a great deal of interest in purchases and leases among foreign companies and their employees, as well as in purchases of land on which business facilities can be constructed. It is characterised by a dramatic increase in the quality of construction, equipment and complete accompanying contents of these facilities, which lack nothing compared to the same types of facilities elsewhere in Europe,” says Đoković.

There is currently a positive investment climate in Serbia, with statistics showing that a lot is being built and traded, and the construction and real estate sectors are very lively, adds Đoković. What needs to be improved, according to our interlocutor, is the simplicity of procedures and reducing of administration in the issuance of approvals for construction and all other supporting documents, eliminating the so-called duplication of documents and content, and increasing the efficiency of the work of administrations. It is necessary to work in parallel to complete all ‘Master Plans’, and to reduce this to usable Detailed Plans and Detailed Regulation Plans. In short, it is necessary to complete the General Urban Plan, Detailed Urban Plan, General Regulatory Plan and Detailed Regulatory Plan.