Projections for the Serbian Real Estate Market in 2025
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Loading... - Jorge Mendez
- 06 Feb 2025
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The Serbian real estate market has shown signs of modest recovery in the first half of 2024 compared to 2023, although its overall value remains below that of the first half of 2022. This recovery is characterized by a decline in the number of sales contracts and a reduction in transaction values, particularly influenced by developments in Belgrade, which continues to struggle.
Shifting Demand: Suburbs Gain Popularity
The housing market in Belgrade, traditionally marked by high prices and strong demand, is beginning to shift as buyers increasingly look to the suburbs. This trend is driven by more affordable prices, a desire for quieter living environments, and the anticipation of the EXPO 2027 international exhibition. Notably, sales of apartments in older buildings are on the rise, while new construction sales are declining. Prices are increasing, but at a slower pace, with central municipalities like Stari Grad, Vračar, and Novi Beograd experiencing drops in both the number of apartments sold and total transaction values. Conversely, outlying municipalities such as Surčin, Zemun, and Čukarica are seeing a 10% increase in sales.
Expectations for 2025
Nebojša Nešovanović, Head of Valuations for Southeast Europe at CBRE, indicated that the cooling of the Belgrade real estate market is likely to continue. He anticipates a return of mortgage buyers, with most capital directed toward apartments priced between €1,500 and €3,000 per square meter, which are expected to be primarily purchased with loans. This segment is likely to see stable or rising prices.
However, demand for high-end new-build apartments, which can reach prices of €10,000 per square meter, has significantly decreased compared to two years ago. Nešovanović noted that investment buyers, who previously purchased these properties to preserve capital or make a profit, are now more hesitant to invest as price growth has stalled.
Ongoing Development and Future Trends
The Serbian real estate market has undergone significant changes over the past decade, with construction and sales volumes tripling. Currently, construction activity is at historic highs, driven largely by investment buyers. Nešovanović mentioned that six major projects are underway in the outskirts of Belgrade, covering approximately 3,500 hectares. While not all projects will materialize, they are expected to shape the future landscape of Belgrade.
Despite the overall market cooling, the first half of 2024 saw growth in construction activity across all regions except Belgrade, with the most significant increases observed in southern and eastern Serbia. This trend indicates a step toward convergence for these regions, which have historically lagged behind in construction and real estate transactions.
Regional Highlights: Bor and Niš
In Bor, the real estate market has transformed due to the influence of the Chinese company Zijin, with prices per square meter doubling over the past three years, now ranging between €800 and €1,200. The market in Niš has also seen a surge, with newly built apartment sales increasing by approximately 60% in the first half of the year compared to the previous year, reflecting a year-on-year growth of about 40% in total sales value.
Decline in Residential Construction
A notable trend in 2024 is the decline in residential construction, while office space development has entered a growth phase. Although the issuance of building permits in Belgrade has increased, it is at a slower rate than in previous years. Tourist regions like Zlatibor and Vrnjačka Banja, which previously experienced intense construction activity, are now seeing a significant drop in building permits. This decline reflects investor caution and uncertainty in the market.
As the Serbian real estate market heads into 2025, it faces a complex landscape characterized by shifting demand, regional disparities, and evolving buyer preferences. While Belgrade's market cools, suburban areas and other regions are gaining traction. The overall outlook suggests a need for adaptation among investors and developers, with a focus on affordability and sustainability in response to changing market dynamics.
