Residential Market

Sales Supply

The residential market in Serbia began its recovery after the political and economical  changes in 2000. The period between 2001 and 2005 marked the beginning of the new residential development cycle, espacially in major cities such as Belgrade, Novi Sad and Nis. In spite of the large increase in residential inventory recorded during this period, capital investments are yet to occur on the construction scene.

Construction of multi family homes has increased by roughly 50% every year since 2003, underpinned by the strong market demand. The most recent detailed study of residentail apartments in Belgrade took place in 2002, at which time Belgrade's residential inventory was 553,307 units (33,935,224 sqm) with an average unit size of 61 sqm.

Residential contruction has remained balanced in terms of unit types in recent years. The breakdown of apartments in terms of size reveals that 2-bedroom apartments make up 32% of the supply, making this the most popular size; other sizes (Studio & 1 BR, 3 BR and 4 BR or more) make up almost equal shares of the remaining stock.

 

Sales Demand

As a result of the general supply increse in an expansion of housing credit options, the residential market has seen a further increase in sales demand. With only a slight difference in price levels of old and new middle-class apartments, many potential buyers are focused on new buildnings that offers quality finishes and facilities appropriate for today's lifestyle. Smaller apartment sizes are in the strongest demand.

Rental Supply

Over the past year, the rental supply of high-quality units in belgarde continued its growth. The supply was mostly centrated in the areas of new Belgrade, Dedinje, Vracar and downtown, comprising mostly 2- and 3-bedroom units.

Rental Levels

With a slight decrease noticed on a yearly level, the average prime rent in Belgrade is €11/sqm/month as of the end of 2006. The most prominent areas of Vracar, Dedinje and Senjak, rental levels showed a slight decrease in light of the continually growing supply of quality apartments in those areas. Demand for rental apartments in New Belgrade has increased along with the supply over the last few years, keeping rental rates steady. Only in rare cases are the most luxurious, large furnished apartments able to achieve rents from  €17 to €19/sqm/month. These apartments are most often situated in the green areas of Dedinje or Senjak featuring beautiful yards or in downtown close to the pedestrian zone  ̶  Knez Mihailova Street.

 

Price Levels

The Statistical Office reported a price increase of 5% in the first six months of 2006 compared to 2005 levels. The recorded growth can be mostly attributed to constantly improving credit conditions, which keeps residential demand at a high level. Price levels are expected to continue increasing until large-scale developments start to appear on the market .

Including both mid-end and high-end category apartments, the sales prices have recorded the following ranges: €1,650-2,500/sqm in Dedinje (Belgrade's residential area), €1,500-2,4007sqm in Stari Grad and Vracar (downtown Belgrade), and €1,300-2,100/sqm in New Belgrade.

 

Rental Demand

Rental demand for high-quality apartments and housing units remained steady i 2006. Demand continues to be driven by embassy staff and personnel of international companies and organizations. The most desired apartment unit sizes range from 100-120 sqm with New Belgrade and downtown being the most preferred areas.

(Source: Colliers International, Serbia)