Current Overview of the Serbian Real Estate Market and Expert Advice

From Belgrade to resort towns: how has the Serbian real estate market developed in recent years? Maria and Roman Belyaev, founders of the Don Balkan real estate agency, reveal the main aspects of the Serbian market: from prices and taxes to the possibility of obtaining a residence permit. Experts analyzed current trends and shared practical advice for potential buyers.

In the Balkans, almost every resident has a property that is rented out.

General Situation on the Serbian Real Estate Market

— News from the Serbian real estate market can be assessed in different ways: if you have already bought real estate, then they are positive – the price is rising; if you are still buying, then everything has become more expensive compared to even last year; Well, if you are still waiting for everything to become cheaper, then I’m afraid that your waiting time will stretch out for a very long time.

Real estate in Serbia, as in most countries of the world, is an investment instrument. The only difference is that in the Balkans, almost every resident has real estate that is rented out, generating passive income or preserving the owner’s funds. What does this mean? This means that the local market is absolutely self-sufficient and provides itself with high demand.

Also, one should not discount the fact that the Balkans are a developing region that has embarked on the European path of development. Therefore, many large corporations, enterprises, and private investors are investing their capital, which gives impetus to the real estate market.

Properties that are in Demand

— The real estate market is confidently moving towards new residential buildings with developed infrastructure and a modern approach to organizing space. Therefore, more and more new projects are becoming similar to the familiar environment of city dwellers in large cities in Russia. When buying/renting an apartment, “our” person strives to buy/rent exactly the atmosphere and convenience.

Increasing demand for the new housing segment is also pushing up the rest of the market. At the moment, the uniqueness of the Serbian real estate market is that the market itself is a patchwork quilt: even in the center of Belgrade, you can find everything at once, from new buildings and resales to a duplex or penthouse.

Premium residential complexes, regardless of the economic situation, will always have their clients. Now we see that in addition to just location and cost per square meter, the quality of construction, service, and content of services in the management company of a residential complex play an important role.

Recent changes to Serbian legislation oblige the developer (or community of residents) to choose a management company that will provide warranty service for the house, networks, etc., which will lead to the emergence of new major players and competition in this area.

— If you are considering real estate from an investment point of view, then purchasing an apartment/f is probably the most understandable and suitable option. It is only important to choose the right property — one that is currently a “venture,” but in the future, with a high degree of probability, will skyrocket.

If Serbia for you is a country to which you moved and decided to stay here, then investing in land plots can also be a good investment, but with acquisition nuances.

Other, more complex options are possible, such as mini-hotels/ready-made businesses, etc., but in order to give the right advice, you need to understand several important parameters: budget, goals, deadlines, and expectations.

The increase in price per square meter can reach 15% per year.

Serbian Real Estate prices

— Belgrade is a big city, and if we go into analytics about what Belgrade is and what you can buy there, it will take hours.

Let's give a very simple example for clarity. A year and a half ago, everyone was saying that “the market is overheated and they will soon give everything away for free — they say, you just have to wait.” Then, on a budget of 50,000 euros, a person coming to Belgrade did not have a very large but still a choice of apartments, and, say, in Vrnjacka Banja — the main mineral resort of Serbia and at the same time our main region of work — there was a choice even on the central streets.

Over the past time, the entry point has smoothly moved to the 70,000 euro mark, and if you are considering only Belgrade, then each of the realtors will recommend increasing the budget to 100,000 euros in order to have the right to choose.

The cost per square meter for new buildings in Belgrade can exceed 12,000 euros per square meter. Of course, there are options that are 7 times cheaper — you can buy an apartment for 1,750 euros per sq.m., bbut it isalready quite on the outskirts.

Inexpensive housing can still be purchased in remote regions of the republic. The city/village itself may have a full-fledged infrastructure: a school, shops, cafés, and a hospital, but the location is the determining factor. At the same time, there have been no prices of, say, 500 euros per meter for a long time.

If you are looking at housing for your personal life and you are satisfied with everything, then an excellent solution for you would be to purchase what you want for your personal budget.

If your goal is investment, then the choice should be made in favor of the capital, large cities with potential or developed tourist centers.

Taxes and utility bills

— When buying Serbian real estate on the secondary market, you will need to pay a tax for the transfer of ownership in the amount of 2.5% of the cadastral value of the property.

If you bought real estate on the primary market, then the price of the real estate includes a VAT tax (analogous to the Russian VAT), which is 10%. In this case, as a rule, the price per square meter is quoted without VAT.

Additionally, annually, you pay property tax of about 0.1% of the cadastral value. If you decide to sell real estate after owning it for less than 10 years, you will need to pay a 15% income tax on the positive difference between the sale and purchase.

— Utility bills in Serbia are a big expense, especially for those who have just moved. Here, you understand that saving light, water, heat, and other resources should be learned from childhood.

Serbia is a small country, it does not have huge thermal power plants, and most of the country uses individual heating and tries to save money.

There is a whole pool of advice for “thrifty housewives” written on the back of the receipt: cover the pots with a lid, wash at night, etc.

But if you survived the first winter and understood the principle of a reasonable and economical household, then everything should be fine, and this will not be a problem.

The average monthly cost of maintaining a one-room apartment is about 70 euros.

Features of Buying Real Estate by Foreigners

— A foreigner can quite easily become the owner of the coveted square meters in Serbia. What you need to remember and know: 

• payments are usually in euros;
• the agreement is only in notarial form;
• over 10,000 euros, all payments must be made through a bank account;
• there must be a licensed translator and 2 witnesses with knowledge of Russian and Serbian for the transaction.

An important nuance is that a foreigner, as an individual, cannot buy land without buildings. It is also worth noting that the fact of purchasing a property does not automatically provide the opportunity to obtain a residence permit/permanent residence permit/Serbian citizenship. To do this, you need to go through a certain procedure.

In addition to Russians, Serbia is home to a very large Chinese, Turkish, and Arab diaspora, as well as expats from Europe.

The place of purchase for most foreigners is dictated by the place of work, and here again we return to the fact that these are either big cities or tourist locations, such as Vrnjacka Banja, Zlatibor, etc.

Possibility of Taking Out a Mortgage

— In theory, foreigners can take out a mortgage to purchase real estate. For example, for IT employees, Raiffeisenbank of Serbia even developed separate mortgage lines for salary projects.

If you work for a Serbian employer or have set up a successful Serbian business, you may qualify for a mortgage loan, but be prepared for the process to be long and require patience.

There are very few mortgage transactions in the country as a whole — in 3 years of working in a Serbian real estate agency, we have not made a single such transaction due to the lack of a client with a loan.

The mortgage rate depends on many factors: your status in Serbia, down payment, loan conditions, etc.

In a broad discussion, it makes sense to look at the situation soberly and understand that for most foreigners, it is inaccessible, and it makes sense to rely only on their savings.

The Attractiveness of Serbia for Investors

— Serbia has many advantages for investors:

• low entry point compared to other European countries;
• simple and clear mechanism for purchasing real estate;
• an easy way to transfer funds. Let's say that Russians still have the opportunity to open a bank account and pay the cost of the contract from the Russian Federation;
• growing market;
• high range of offers on the market;
• the ability to rent out a property;
• ease of starting your own business.

Residence permits based on real estate ownership, and then permanent residence are big advantages, but you need to remember that for permanent residence there are requirements for the period of absence from the territory of Serbia — no more than 10 months for 3 years in total.

— The main source of income for investors in the local market is the increase in the price per square meter.

Therefore, if we are talking about shared construction, then the difference between your entry and exit points is your income. Provided that the property is of interest to the market, the price increase can reach 15% per year.

Renting is more about additional income in addition to changing the price per square meter. It is not entirely correct to consider renting as a way to generate a high income — the yield in most cases will not exceed 5%.

By the way, the Serbs themselves are active market participants. They try, whenever possible, to buy real estate for passive income or to save money. They often live in their own apartment or house.

Renting is usually a story about students, a young family, or a change of region for work. Everyone strives to become the owners of their personal square meters.

Decent offers on the rental market are selling like hotcakes.

Serbian Rental Market

— The Serbian rental market is doing great. Worthy offers are at odds with the speed at which hot cakes are sold. There is still high demand in the premium segment from relocants from the Russian Federation, plus locals are also active participants in this market.

Demand for the medium and inexpensive segment will depend on location, arrangement, and the main parameter — price.

In general, regardless of the offer price, all owners compete with each other on quality and price, which is why our rental business packaging services are in great demand.

2022 was the year of a tsunami in the rental market: total demand, lack of supply, etc. But in a few months, it leveled out, developed rules and requirements for the landlord and tenant, and now the market is experiencing uniform growth. But, as usual, the most flexible and resilient will survive.

Prospects and Forecasts

— It is now difficult for a modern person to make forecasts since there are a lot of unknowns around, but we see a trend towards rising real estate prices. And this trend will continue since global projects await us, such as, for example, EXPO 2027.

We see an increase in the quality of services, which, of course, will also have a positive impact on the market.

Simplifying the procedure for obtaining a residence permit in Serbia will make it possible to attract foreigners who will rent/buy housing and develop their businesses.

Therefore, we can only wish everyone successful purchases on the Serbian real estate market.