Nenad Djordjević – Our citizens and businesses buy real estate as the safest type of investment

The negative consequences of the war in Ukraine will not affect our real estate market, in a way similar to what is happening in some Western countries

  • According to the report compiled by the Republic Geodetic Authority, turnover in the real estate market in Serbia increased by 22% in 2022. In 2020, the turnover amounted to 4.2 billion euros, in 2021, to 6.1 billion, and in 2022, to 7.5 billion euros.
  • The highest turnover in the real estate market in Serbia was recorded in the City of Belgrade (about 60% of the total turnover), followed by Novi Sad and Niš. The highest growth in sales last year was recorded in southern and southeastern Serbia, particularly in the town of Bor.
  • Last year, real estate prices grew by between 15 and 20% (depending on the type of real estate), while the market trends are expected to stay the same in the coming period. The slight increase in turnover and prices will continue, but growth rates will not be as high as before.

In 2022, a substantial number of people from the Russian Federation, Ukraine and Belarus came to Serbia. They have contributed to a drastic increase in the demand for apartments for rent, but also for business space because many of them have moved their business to Serbia. This has led to a large increase in rent. In late 2022, the rental real estate market stabilized, but the market prices remained at a significantly higher level than in 2021. Citizens of the Russian Federation and Ukraine who came to Serbia could not easily take money out of their country, so they did not have a significant influence on the real estate market in Serbia. A smaller number of people coming from these countries still bought real estate in Serbia.

Until 2022, about 99% of buyers in the Serbian real estate market were Serbian nationals and only about 1% were from abroad, mostly from the Republic of Srpska, Montenegro, Greece and the UAE. The biggest obstacle to having more foreign real estate buyers in our country is the absence of a law that allows foreign citizens who invest the appropriate amount of money in real estate in Serbia to be given permanent residence in the Republic of Serbia. Almost all developed Western economies have such programmes – the USA has the EB-5 Immigrant Investor Program, while Portugal, Greece and many other European countries have the Golden Visa programme.

Our citizens and businesses buy real estate as the safest type of investment out there. Unlike other countries of the socialist bloc, the former Yugoslavia had the institution of private ownership of the real estate, residential and commercial buildings and agricultural land, which could be freely traded with. Due to inflation, which was high at the time, people bought real estate to preserve the value of their capital.

During the 1990s wars and sanctions, people kept their foreign currency savings at home or used it as capital that was invested in real estate. The real estate market was very active even then, and prices were significantly higher than in the neighbouring countries that were not affected by the war.


In 2022, only 11% of real estate transactions in Serbia were financed from loans


In the developed European economies and the USA, over 80% of real estate transactions are financed from loans, which is why the decline in economic activity, the increase in unemployment and the uncertainty caused by the war usually lead to a decrease in the real estate market turnover. This is not the case in our country, given that in Serbia, cash is mostly used in real estate transactions. Most of real estate buyers are ordinary people who previously sold a property and want to invest the funds they got from that in buying another piece of real estate. It has been estimated that in our real estate market, the purchase and sale of three to five other properties in this sale/purchase chain are financed with the funds obtained from the sale of one property. The sale of the first property “in the chain” is financed from a loan, or from the money that our citizens living abroad send to their family/friends, and these are usually the funds they take from their savings accounts.

In the previous decade, despite the stable dinar/euro exchange rate and good macroeconomic indicators, the share of real estate transactions financed from loans was between 15 and 16%. In 2022, only 11% of real estate transactions in Serbia were financed from loans. The purchase of apartments was mostly financed from housing loans, so in 2020, over 31% of apartment purchases were financed from loans, and in 2022, that percentage was 26.

We can conclude from all of this that the negative consequences of the war in Ukraine will not affect our real estate market, in a way similar to what is happening in some Western countries. In many Western countries, including the USA, which has the largest real estate market in the world, the market is stable and growing, regardless of the war.

In our country, the fall in the number of buyers who financed the purchase of real estate from loans in 2022 was compensated by an increase in the number of our citizens who, due to fear of the crisis caused by the war in Ukraine, withdrew money from their savings accounts and invested it in real estate, as well as by an increase in the number of foreigners in Serbia who bought real estate. Many of our citizens living abroad used their foreign currency remittances to buy real estate in Serbia, fearing the escalation of conflicts in Europe.

Due to the increase in the price of building materials and building land, there was a decrease in the number of building permits issued in 2022, which may lead to a decrease in the amount of newly built residential and commercial buildings in the next two years, which, in turn, will shrink the real estate offer and affect price growth.

The draft Law on Amendments to the Planning and Construction Law proposed by the Ministry of Construction, Transport and Infrastructure prescribes the abolition of the fee for the conversion of the right of use into the right of ownership of building land for certain types of companies. Public companies that have not yet been privatized, cooperatives, enterprises that own property that is the subject of a succession process in the former Yugoslavia and sports associations will not be entitled to this right. After the adoption of the proposed amendments to the law, the supply of building land will increase, especially in Belgrade and other major cities in Serbia, which will lead to the stabilization of the real estate market and continued growth of the construction sector.

What do Serbian real estate brokers want?

The draft law stipulates that notaries public and companies engaged in drafting spatial and urban planning documents will be entitled to issue information on location conditions. Up until now, this was in the hands of the state administration.

The Real Estate Cluster Association has appealed to the line Ministry to give real estate brokers the right to issue information on location conditions. Two years ago, we launched an initiative with the Serbian government to amend the Law on Real Estate and Utility Cadastre Registration to enable real estate agencies to issue an extract from the Real Estate List, so that both citizens and businesses can do what they need to do in one place, thus facilitating the process of buying and selling of real estate.

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