Branislava Gajic Stanojevic, director of 4zida.rs – We are heading toward a stabilization of apartment prices, and not further increased growth

Last year in Serbia was a record year when it comes to the number of built apartments, and this spring, a drop in the interest among average citizens is noticeable, due to the unfavorable economic conditions. Still, those who buy real estate still use cash much more, but this can give off a wrong impression sometimes – it should be kept in mind that this includes purchasers who have sold their apartment or house.

A modern purchaser has certain demands from the investor, and those who build facilities face problems such as a lack of workforce and an increase in the prices of building materials. Regardless of it all, it seems that we are heading toward a stabilization of prices, and not further increased growth.

We discussed these topics with Branislava Gajic Stanojevic, the founder, co-owner and member of the Management Board of Inspira Group and the director of 4zida.rs.

According to the data for June this year, around 3,000 apartments are being built in Serbia. How many apartments are built on an annual level and is this year different compared to the previous ones?

– Before the coronavirus, we were at around 25,000 built apartments per year in Serbia, after which the number grew to around 29,000, and last year was a record year with around 35,000 apartments. After the coronavirus, real estate also became a good business for investors and a good opportunity for investment for people with capital, and for most of the populace, they are however an essential need. This year, we are hovering around a similar number of the issued building permits as last year. It varies from month to month, but the market has experienced a drop in the interest among average citizens since this spring, due to the unfavorable economic conditions, so the first half of the year was marked by the need to sell the real estate whose construction has already started.

According to the Deluxe Holiday Homes study, Serbia recorded the biggest increase in the prices per floor area between 2023 and 2024, and real estate is still most frequently bought with cash. Who are the most frequent purchasers of apartments in new buildings.

– The high share of cash purchases can give off a wrong impression sometimes, and it should, in fact, be kept in mind that this includes purchasers who have sold their apartment or house and are now buying something new with that cash. There’s something interesting there, which is that, in addition to people in management positions and the IT sector, according to the data of Infostud which belongs to our group of businesses, it is also civil engineers, but also craftsmen of various profiles, that belong among those professions, in terms of pay, who can afford to think a bit more easily about purchasing an apartment. Of course, there are plenty of investment purchasers who invest for the purpose of renting out or who simply want to preserve the value of their money and it is expected for them to make use of the kind of wave we’ve had.

What is it that the modern purchaser now looks for when it comes to apartments in new buildings and what is the investors’ response to that?

– It all depends on the type of purchaser. On one hand, there are people with more paying power, for whom location, comfort, construction quality and the commercial potential of the real estate come first. On the other hand, there are people for whom the most important factor is the price or the floor area for family needs, so they are more likely to choose new building projects outside the central locations, which is why cities are purposefully expanding, which gives room to small and medium investors too.

One of the biggest challenges for the investors is the lack of workforce. Do you believe that this trend will continue? How can this be overcome?

– Those are market problems that are not typical of us only and it is best to take a look at what used to happen in the neighboring countries, which is similar to what’s happening here now: the import of workforce from eastern countries, the increase in the price of labor. For example, in the previous years, Hungary also experienced a high outflow of the local workforce and an increase in real estate prices, which was surprising for the populace and which burdened them, and now it has suddenly stabilized, but at that higher level. And it is precisely the investors there that have told me that one of the factors maintaining the interest in apartments in new buildings, although they are expensive, is that it is difficult to find the building workers. The investors can gather them for the needs of their own projects, but an average person who wants to buy an apartment in an old building and renovate it has a problem finding workers and that is another reason why people sometimes opt for apartments in new buildings. We already know that, in Serbia, it is difficult to find good workers and that they cost money, so this could be reflected here too. Plus, it can be an opportunity for new small entrepreneurs which would provide renovation services for natural persons under the turnkey system.

Another big problem is the increase in the prices of building materials. In the first quarter of this year, it is noticeable that the prices have remained at last year’s level, and the demand also influences the stability of the prices, so this trend is expected to continue in the coming period. How do you expect this to reflect on new buildings and apartment prices?

– Stable material prices are certainly good for the market, because they provide certainty for both the investors and the purchasers, especially when it comes to paying in tranches. This leaves us with the factors of the inflation, labor price, demand and supply ratio, but also the geopolitical conditions. To sum it all up, it seems that, at the moment, we are heading toward a stabilization of the prices, and not further increased growth.