News Article Belgrade Cordon report residential SEE Serbia
by Property Forum | Report

Belgrade’s residential market is not cooling down with demand remaining strong and price growth continuing, according to real estate agency Cordon’s report for Q2 2023.

Key conclusions:

  • The total transaction volume in the second quarter in Belgrade was €596 million, which represents a decrease of around 16 % compared to the overall amount of €707 million which was registered in the second quarter of 2022. This decrease was expected since the second quarter of the previous year was record-breaking at that time due to the Ukrainian conflict, which caused a spike in volume numbers.
  • The total volume of €596 million represents an increase of around 7% compared to the second quarter of 2021, which is a more adequate benchmark, and this comes as a surprise given the subjective feel that the market has slowed down.
  • Official numbers show price growth of around 11% from the second quarter of the previous year, but this number does not accurately show the current trend where the prices are stagnating, and some developers are also giving small discounts.  From the perspective of the total volume, discounts seem more like a price correction and the market, for the time being, is continuing at its regular pace.
  • It was expected that the number of credit buyers would drop given the high interest rates, but it also comes as a surprise that the total number of credit transactions was around 20%, compared to the usual figures of around 30% from last year.
  • The total amount of money allocated for financing rose only by 4% from April to June of this year which indicates small loan amounts, and that credit is for the most part being used by investment buyers and cash buyers, and not necessarily the end users who are financing a larger portion of the price through credit.
  • It will be interesting to see what happens with the speculative buyers in the coming period, as they are not a large portion of total buyers, but certainly an influential part of the market. Speculative buyers show up at the beginning of the sales process of any new project and take advantage of early bird specials and in prior years of exponential price growth were able to make as much as €500-1000/sqm in profits for a hold period of 2-4 years. The only way for them to stay in the market is to negotiate discounts to current pricing.
  • Official data for the first-time show figures from a partially regulated market, which they define as real estate which does not have full documentation for the clean inscription into the cadaster, and they also acknowledge the existence of the unregulated market for which they have no information. Currently, there are 4.9 million entries in the cadaster which meet all of the requirements for being fully regulated, and approximately 4.8 million units (apartments, houses, land, retail, garage, etc.) that do not meet all of the requirements. Surprisingly, more entries in the partially regulated market last year came from purchases of apartments directly from investors, compared to purchases between individuals.