Buying real estate in Serbia?

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Is it a good time to buy a property in Serbia in 2024?

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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


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 has been able to strengthen its democratic institutions, while also keeping a strong focus on economic and social development, leading to a more stable and secure country. Additionally, Serbia has been able to build strong ties with its neighbors, which has helped to maintain a peaceful and prosperous region.

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


Second thing to do before buying a property: consider the country's economic condition.

In accordance with IMF projections, Serbia will end 2023 with a growth rate of 2%, which shows the country is on the right path. As for 2024, the figure we're looking at is 3%.

Besides that, the economy will keep growing since Serbia's economy is expected to increase by 15.3% during the next 5 years, resulting in an average GDP growth rate of 3.1%.

The expected sustainable growth rate in Serbia is a good thing for someone wanting to invest in real estate because it indicates a stable, long-term economic growth that will result in increased demand for housing and rising property values. This provides investors with the confidence that their investments will be secure and profitable over time.

That said, GDP growth is just one piece of the puzzle!Serbia gdp growth

Serbian business owners have a neutral outlook towards market conditions


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 1 for Serbia. It can be interpreted as a weak score.

There hasn't been significant change, considering that the BCI score, 12 months ago, registered at 3.

Even if the Business Confidence Index (BCI) score is currently low in Thailand, it shouldn't discourage people from considering property investments. A low score usually means there is a temporary period of uncertainty or caution in the business sector, which is a normal part of the economy's ups and downs.

That's why it's important to look at other factors before deciding whether it's the right time to buy property in Thailand.

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Serbia is delivering less building permits


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 2024.

Serbia's population is growing and getting a lot richer


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. Furthermore, the Serbian population is growing (+25% in 5 years).

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 2024.

No high rental yields in Serbia


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 2024.

Serbia rental yields

Everything you need to know is included in our Serbia Property Pack

In Serbia, inflation is projected to increase


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 21.2% over the next 5 years, with an average annual increase of 4.2%.

It means that Serbia is expected to experience inflation. If we look just at this signal, then it may be a good time to consider buying property. This could allow you to sell it later for a higher price and make a profit.

Is it a good time to buy real estate in Serbia then?

Let's wrap things up!

2024 offers a promising opportunity for property investment in Serbia, driven by a range of favorable signals that suggest a conducive environment for real estate endeavors. Serbia's projected growth over the next five years signifies a positive backdrop for property investors. Economic expansion often correlates with increased demand for housing and properties, potentially leading to capital appreciation.

The growing population and improving financial status of Serbia's residents further enhance the appeal of property investment. As the population's prosperity increases, the demand for housing and real estate is likely to rise, creating opportunities for both capital appreciation and rental income.

The projection of increasing inflation can be advantageous for property investors. Real estate is often considered a hedge against inflation, as property values have the potential to rise alongside increasing prices, offering a means of preserving and potentially increasing an investor's purchasing power.

While there are neutral signals in terms of stability, business sentiment, and building permits, it's worth noting that the lack of high rental yields might be compensated by the other favorable factors such as growth potential, population prosperity, and inflation protection. This makes 2024 a promising year to explore property investment opportunities 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.

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.

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