Apartments are sold the most and make over 55 percent of sales of all other types of real estate
Growing prices and increased money supply compared to all previous periods are the main characteristics of the real estate market at the moment. The strong double-digit annual growth in apartment prices continued in the fourth quarter of 2022 and lasted throughout the year.
The annual growth rate of apartment prices in the Republic of Serbia stood at 13.7% in the fourth quarter of 2022, while the prices of apartments in Q4 compared to the Q3 of 2022 increased by 3.3%
In terms of price dynamics, a more significant increase of 16.1% in the Q4 of 2022 in the prices of apartments in older buildings was noticeable. In terms of new apartments, i.e. buying real estate directly from the developer, there was a slowdown in the Q4 of 9.3% (vs. 10% in the third quarter of 2022), with relatively higher prices of newly built apartments compared to those in older buildings.
In terms of the price index, in the Q4 of 2022, as in the previous period, Vojvodina (index value 151.32) and the city of Belgrade (index value 148.40) are in the lead. Novi Sad is the champion of price increase, where average prices of apartments now range between 2,000 to 2,500 euros per square metre, while in Belgrade, the prices range from 2,000 to 10,000 euros per square metre. The average price of a square metre of a new apartment is 2,500 euros, while the average price of an apartment in an older building is 2,000 euros.
As in the previous few quarters, somewhat more dynamic growth has been recorded in the regions of Southern and Eastern Serbia, where the annual growth rate in Q4 was 15.1% (slightly lower than in the third quarter of 2022, when this rate was 15.8%).
In Vojvodina and Belgrade, where the prices are relatively higher compared to the Serbian market average, comparable price growth rates in the Q4 of 2022 remained at the Q3 level and stood at 13.6% and 14.4% respectively.
Novi Sad is the champion of price increase, where average prices of apartments now range between 2,000 to 2,500 euros per square metre, while in Belgrade, the prices range from 2,000 to 10,000 euros per square metre
The number of apartments sold in the Q4 of 2022 went up by 0.6% compared to the same period in 2021. Considering that prices are still growing strongly, as well as the share of sold apartments in the (more expensive) regions of Belgrade and Vojvodina (10.6 % and 2.3% respectively), the total value of the market, measured by the sum of realized apartment sales, grew at a record percentage in 2022, i.e. by 36% year-on-year.
In the previous period, compared to international trends, the housing price index in Serbia had a similar growth trend as some of the countries in the region (Croatia, Slovenia, Bulgaria), in contrast to countries such as Germany, Sweden, Denmark and the Netherlands, which in the third in the quarter of 2022, recorded a price slowdown or even a decline (2.4% in the case of Denmark). The price index in the 27 EU countries indicates a slowdown in year-on-year price growth to 7.4% in the third quarter from 9.8% in the second quarter of 2022.
Apartments are sold the most and make up over 55 percent of sales of all other types of real estate. In 2022, the total value of the Serbian real estate market exceeded seven billion euros. The most attractive real estate regions are Belgrade, Novi Sad, Niš, Kragujevac, Zlatibor, Kopaonik, Novi Pazar, Pančevo and Subotica. Newly built apartments are more popular with the younger population, while the older generations prefer apartments in older buildings.
To sum up, the market is in the so-called phase of overheating, but not yet boiling, and according to current indicators, it will continue to grow, at least within the framework of inflation in the eurozone.