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Everything you need to know is included in our Serbia Property Pack
Are you considering buying real estate in Serbia? Are you contemplating whether you should make a purchase now or in the coming year?
Market timing is a subject where opinions vary among individuals. The Serbian real estate agent you know may suggest that it's currently a good time to buy property, but your childhood friend living in Belgrade suggests waiting for a couple more months.
At Investropa, when we create articles or update our pack of documents related to the real estate market in Serbia, we base our work on verifiable facts and concrete data rather than subjective opinions.
We have thoroughly examined all the official reports and statistics available on government websites. Now, we have a comprehensive database of reliable information and we can help you determining whether it is currently advantageous to purchase real estate in Serbia.
Enjoy the article!
How is the property market in Serbia now?
Serbia is, today, a relatively stable country
Neutral
Stability is a necessary condition when investing in real estate because it promotes property ownership, rental demand, and sustainable growth. It is an information you need as a foreigner looking to buy a property in Serbia.
These days, Serbia is experiencing a notable degree of stability. The last Fragile State Index reported for this country is 67.8, which is an acceptable number.
Serbia's relative stability today can be attributed to its ongoing efforts to integrate with the European Union, which has driven political and economic reforms aimed at improving governance and fostering economic growth. Additionally, the normalization of relations with neighboring countries, particularly through the EU-facilitated dialogue with Kosovo, has contributed to regional stability and reduced ethnic tensions.
Let's examine other data now to see if it's the right moment to purchase property in this country.
Serbia will keep growing in the next 5 years
Positive
Second thing to do before buying a property: consider the country's economic condition.
In accordance with IMF projections, Serbia will end 2024 with a growth rate of 3.5%, which shows the country is on the right path. As for 2025, the figure we're looking at is 4.5%.
Besides that, the economy will keep growing since Serbia's economy is expected to increase by 17.9% during the next 5 years, resulting in an average GDP growth rate of 3.6%.
The expected sustainable growth rate in Serbia indicates a stable and growing economy, which can lead to increased property values and rental demand, making real estate investments more profitable. Additionally, a stable economy reduces investment risks, providing a safer environment for real estate investors.
That said, GDP growth is just one piece of the puzzle!
Serbian business owners have a more favorable view of the economy
Positive
Although the GDP forecast provides insights, it may not fully capture the local sentiment in Serbia as it relies on external projections. Fortunately, in Serbia there is an official metric that is consistently updated. This doesn't apply to every country, so we're in luck.
The metric known as the Business Consumer Index (BCI) evaluates business leaders' confidence in the current and future economic conditions, utilizing surveys and assessments.
The most recent data published by The Global Economy shows that the Business Confidence Index stands at 7 for Serbia. It can be interpreted as a rather neutral score.
That's really encouraging and the trend is upward: the BCI score, 12 months ago, was at 2.
Even though the Business Confidence Index (BCI) score is currently at a moderate level in Thailand, it shouldn't deter individuals from considering property investments. A moderate score often indicates a period of uncertainty or caution in the business sector, which is a typical aspect of the economy's fluctuations.Therefore, it's crucial to consider other factors before deciding if it's the right time to invest in property in Thailand.
Serbia is delivering less building permits
Neutral
An important factor to consider when deciding whether it's an opportune time to invest in property in a country is the number of construction permits granted. When more building permits are granted, it indicates a healthy property market and a positive direction.
Unfortunately, the number of building permits delivered is decreasing in Serbia.
Over the past year, according to Statistical Office of the Republic of Serbia, the number of building permits issued by the Serbian municipalities fell by 2.5%, from 31,592 to 30,806 units.
This is definitely a negative signal. Let's look at more data.
One last important point to consider is that fewer building permits result in a reduced supply of properties. If this is the case, it is likely that housing prices will increase in Serbia in 2025.
Serbia's population is getting a lot richer
Positive
When you're looking to buy real estate, population growth and GDP per capita deserve careful consideration because:
- a growing population means more people needing homes
- a higher GDP per person means people have more money to spend on housing (which can lead to increased property value over time)
In Serbia, the average GDP per capita has changed by 17.4% over the last 5 years. Almost no country has done better.
This means that, if you purchase a modern apartment in Belgrade and rent it out, you will find that each year, you'll attract more tenants with sufficient funds to cover the rent.
If you're considering purchasing and renting it out, this trend is a good thing. Then, the demand for rentals is predicted to increase in Serbian cities such as Belgrade, Novi Sad, or Niš in 2025.
No high rental yields in Serbia
Neutral
Rental yield is a widely used method for assessing real estate investments.
It represents the annual rental income generated by a property divided by its purchase price or market value. For instance, if a property in Serbia is purchased for 12,000,000 RSD and generates 720,000 RSD in annual rental income, the rental yield would be 6%.
Based on the data provided by Numbeo, rental properties in Serbia promise gross rental yields from 2.5% and 5.2%. You can find a more detailed analysis (by property and areas) in our pack of documents related to the real estate market in Serbia.
It indicates a moderate level of income generation.
As seen before, the supply of real estate will remain the same, and the pool of wealthy tenants will expand. Consequently, rental yields may increase in Serbia in 2025.
Everything you need to know is included in our Serbia Property Pack
In Serbia, expect minimal inflationary effect
Neutral
Simply put, inflation is the erosion of purchasing power.
It's when your customary plate of pljeskavica costs 600 Serbian dinars instead of 500 Serbian dinars a couple of years ago.
If you're considering investing in a property, high inflation can bring you several advantages:
- Property values tend to increase over time, potentially leading to capital appreciation.
- Inflation can result in higher rental rates, increasing the property's cash flow.
- Inflation decreases the real value of debt, making mortgage payments more affordable.
- Real estate can act as a hedge against inflation, helping preserve the investment's value.
- Diversifying into real estate provides stability during periods of inflation.
According to the IMF, the inflation rate in Serbia will increase by 1.0% over the next 5 years, with an average annual increase of 0.2%.
It means that Serbia is anticipated to experience negligible inflation. Unfortunately, in the absence of inflation, purchasing a property now may not result in substantial price increases or substantial profits in the future.
Is it a good time to buy real estate in Serbia then?
Let's wrap things up!
2025 is shaping up to be a promising year to invest in property in Serbia, and there are several compelling reasons for this. First off, Serbia is currently a relatively stable country, which is a crucial factor for any real estate investment. Stability in a nation often translates to a more predictable and secure environment for property buyers, reducing the risks associated with political or economic upheaval. This stability is a solid foundation for making long-term investments, such as purchasing property.
Moreover, Serbia's economy is on an upward trajectory, with an expected growth of 17.9% over the next five years, averaging a GDP growth rate of 3.6%. This sustainable growth rate is a positive indicator for potential property buyers, as it suggests that the economy will continue to expand, leading to increased property values and rental demand. A growing economy often means more job opportunities and higher incomes, which can drive up the demand for housing, making real estate investments more profitable.
Another factor to consider is the current trend in building permits. Serbia is issuing fewer building permits, which could lead to a limited supply of new properties in the market. When supply is restricted and demand continues to grow, property values tend to rise. This scenario creates an advantageous situation for those who invest in real estate now, as they could benefit from potential appreciation in property values over time.
Additionally, Serbia's population is becoming wealthier, which bodes well for the real estate market. As people have more disposable income, they are more likely to invest in property, either for personal use or as rental investments. According to data from Numbeo, rental properties in Serbia offer gross rental yields ranging from 2.5% to 5.2%, which is an attractive return for investors. Furthermore, with minimal inflationary effects expected, the purchasing power of both investors and renters is likely to remain stable, making 2025 an opportune time to buy property in Serbia.
We wish this article has been of help!. If you need to know more, you can check our our pack of documents related to the real estate market in Serbia.
-Will real estate prices go up in Serbia?
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.