In late 2019, it was disclosed that real estate prices would rise next year as well, but the consequences of the coronavirus outbreak affected the real estate market in Serbia very quickly. After March 16, when the state of emergency was introduced, the real estate market almost came to a standstill, and this was especially true for the purchase and sale of the property. However, we can say that the real estate has completely reverted to the pre-pandemic period, while most of the parameters show that the coronavirus has not greatly affected real estate prices for now.
The largest real estate sales have been, as expected, recorded in Belgrade, where the real estate market was worth 2.2 billion euro in 2019. If we look at the entire municipality, the average price of apartments in old buildings, advertised on the site www.4zida.rs in July was 1,637 euro /m2. In the first quarter of this year, the average price of apartments in old buildings was 1,457 euro/m2, and in the second quarter 1,609 euro/m2. We can observe that, regardless of the state of emergency, the second quarter brought an increase in prices. The same goes for the average prices of houses. Looking at the whole municipality, the average price of houses in the first quarter was 859 euro/m2, and in the second quarter 1.000 euro/m2.
Savski Venac surpasses Stari Grad
The most expensive apartments in Belgrade are the ones in the Belgrade Waterfront complex. Last year, one of the apartments in the complex was sold for 1.32 million euro which broke the record in terms of the most expensive property in Belgrade – 8,683 euro/m2. If regard to Belgrade’s municipalities, according to the data compiled www.4zida.rs, the municipality of Savski Venac surpassed the municipality of Stari Grad in terms of the price per square metre of properties for sale, so the average price of a square metre of apartments in new buildings in this municipality stood at 2,641 euro, and in old buildings 2,565 euro. The construction of apartments in the Belgrade Waterfront complex has greatly influenced the growth of prices in old buildings in the surrounding neighbourhoods, so the average price of a square metre of apartments in old buildings in Savamala is now 2,723 euro/m2. The growth of real estate prices in this municipality is best illustrated by prices from 2018, where a square metre of apartments in old buildings in the third quarter averaged 1,766 euro, and in the last quarter of 2018, it jumped to 2,628 euro.
Stari Grad is the second most expensive Belgrade municipality in terms of real estate prices, after Savski Venac, where the average price of apartments in old buildings advertised on the site www.4zida.rs is 2,466 euro/m2 and those in new buildings 2,775 euro/m2. In this municipality, the most expensive apartments are located in Obilićev Venac and Knez Mihailova Street, and the cheapest around Bajloni’s outdoor market and in Kopitareva Gradina.
In which Belgrade municipalities buyers prefer houses over apartments?
During the state of emergency, it seems that the interest in buying houses was bigger than ever before, especially those located on the outskirts of larger cities – Belgrade and Novi Sad. More extensive research on this topic should be conducted in order to draw firm conclusions.
However, even before the state of emergency, houses were more expensive than apartments in some Belgrade municipalities.
Although the apartments in Savski Venac are the most expensive in Belgrade, also in Serbia, houses in this municipality are even more expensive. Thus, the average price of the advertised houses on sale in Savski Venac is about 150 euro/m2 higher than the average price of the advertised apartments and amounts to 2,803 euro/m2. The most expensive houses are in Dedinje and Senjak, where some houses are sold for 4,000 euro/m2.
In the municipality of Stari Grad, houses are sold for 200 euro/m2 less than apartments in old buildings and their average price stands at 2,247 euro. In Vračar, houses are also sold at high prices for an average of 1,955 euro/m2, while in other Belgrade municipalities, they are sold at prices below 1,000 euro/m2. If you don’t really need a house in the central Belgrade municipalities, you get the best value for your money if you buy a house in the suburbs like Barajevo, Lazarevac and Sopot. Here, the prices of houses average around 360 euro/m2, and most of them have a yard.
Real estate prices in Belgrade have not dropped
Although at the beginning of the state of emergency, the presumption was that this extraordinary circumstance would affect the price of real estate in Belgrade, based on data from the first and second quarters, we see that this did not happen in most city municipalities. Most city municipalities recorded an increase in the price per square metre of property in the second quarter compared to the first quarter. Only in the municipality of Savski Venac, there was a decrease in the price of apartments in old buildings. On the other hand, in the same municipality, house prices increased drastically in the second quarter compared to the first quarter of this year (Q1 – 2,273 euro/m2, Q2 – 2,812 euro/m2).
Prices of apartments in Novi Sad unchanged
After Belgrade, Novi Sad is the second city in Serbia in terms of sales in the real estate market. In 2019, the real estate market here was worth 470 million euro (generated from the cumulative value of purchase agreements). If we exclude the state of emergency, during which minor changes took place mostly in regard to renting, the real estate prices in Novi Sad have been growing year-on-year. The average price of apartments in old buildings advertised for sale is 1.353 euro/m2, while the apartments that are located around the Novi Sad Fair are sold at the highest prices, exceeding 2,000 euro/m2. The second most expensive apartments are those located in the vicinity of SPENS and in the town centre.
A large number of newly built apartments have also driven up the real estate prices in Novi Sad. Real estate agents say that, regardless of a large number of apartments on offer, the demand in Novi Sad is still higher than the supply, and this is especially true for newly built apartments. The average price of apartments in new buildings is 1.414 euro/m2.
The state of emergency did not significantly affect the prices of apartments for sale. If we compare the first and second quarter of this year, we can see that the prices of apartments in old buildings have remained almost the same –1,381 euro/m2 in Q1 and 1,388 euro/m2 in Q2.
Houses in Novi Sad cheaper
The average price of houses in Novi Sad is 719 euro/m2. Like the apartments, the houses located in the vicinity of the Novi Sad Fair have the highest price of 1,736 euro/m2, followed by the houses in Adamovićevo Naselje and Grbavica. These two neighbourhoods are still very popular with real estate developers, and that is one of the reasons why houses in these locations are so expensive. The average price of houses is less than 500 euro/m2 in the suburban municipalities of Novi Sad.
It is interesting to note that, if we look at the entire municipality of Novi Sad, houses in the second quarter became cheaper compared to the first quarter of this year (Q1 – 835 euro/m2, Q2 – 668 euro/m2). Such prices of houses have not been recorded since late 2017.
State of emergency fails to have a major impact on other cities as well
The real estate market in other cities, which are lagging behind Belgrade and Novi Sad in terms of real estate sales, is the real indicator of the impact of the state of emergency. In Kragujevac and Subotica, apartments in old buildings recorded a higher price in the second quarter compared to the first quarter of this year. Apartments in Niš have become slightly cheaper, but houses have become more expensive, on average by about 20 euro/m2.
Conclusion
The real estate market has shown great flexibility and has quickly returned to the state before the state of emergency period. However, in the previous months, we have seen how sensitive the real estate market can be and how much it depends not only on the purchasing power of citizens but also on economic stability in the country.
Real estate price changes during and after the state of emergency
If we observe the second quarter of this year, out of 69,000 ads for the sale of apartments in old buildings, advertised on www.4zida.rs in that period, the prices in almost 12,000 ads changed, which is 17% of the total number of ads on the site. Of that, 5% of the ads featured an increased price while 12% featured a lower price of the real estate on sale. Properties in Belgrade and Novi Sad were sold at the most reduced prices. In Belgrade, the rental of real estate experienced a bigger drop in price than the sale. Of the total number of ads in Novi Sad that featured a changed in price, the biggest change occurred in rental apartments, where the price decline was 8%. However, the change in prices was recorded in a small number of ads, so that number did not lead to a drop in the average price at the city level.
** The presented analysis was carried out on 75,000 ads for properties in old buildings, which is how many were advertised on www.4zida.rs as well as on 160 new construction projects.