What are the conclusions of the panel 'News on the residential real estate market in the Western Balkans'
The second joint conference RICS and NAVS (National Association of Valuers of Serbia) due to the corona virus pandemic was held via video link, and the topic of the conference "Current trends and opportunities in the market of Southeast Europe and the role of professionalism in further developing our markets" gathered 170 participants from ten countries.
18 panelists from Serbia, Montenegro, Bosnia and Herzegovina, Croatia, Romania and Great Britain talked about current events at the global and regional level and Miloš Stanojevi?, Consultancy Partner at West Properties, also participated in the second panel on the topic "News on the residential real estate market in the Western Balkans".
The moderator of the panel, Ka?a Lazarevi?, pointed out that not everything was so rosy with the introduction of emergency measures. "We tried to work all the time with precautions. There were those who were scared, but also those who wanted to get moving. We were followed by banks, notaries, but RGZ closed, which made the situation more difficult. Now that the corona is present and we live with it, we seem to be doing better. In June, over 10,000 real estate transactions were registered in Serbia, but still the level from last year was not reached," Lazarevic pointed out.
"Everything is causally consequential. The pause we had at the beginning and the fear are real due to the messages we could hear and which ordered "stop". This gives a situation in which interested buyers stop, so in this period we can not say that we had a decline, but stagnation, which is natural according to the situation," said Milos Stanojevic, Consultancy Parnter at West Properties. Stanojevic also pointed out that there are no changes in the residential real estate market in Serbia, because the jump that was recorded in June compared to last year is unnatural and is a consequence of the blockade and the impossibility of showing real estate and doing business during a state of emergency. "The role of real estate intermediary is regaining its true meaning in these times," Stanojevic points out. "In the overall situation brought by corona as a buyer, you are looking for the support of a consultant who will provide quality response and professional guidance, and West Properties is working intensively on that. "
In Croatia, in addition to the corona, the earthquake had a great impact on the real estate market in Zagreb, when the city center was damaged, said Boro Vujovi?, director of Operetta Real Estate. "Due to this situation, the real estate market in the center of Zagreb practically does not exist. A certain number of buyers opt for other city locations, and some buy land on the periphery and build themselves or buy houses. On the other hand, cottages in the Lika area have been sparsely populated so far, with low prices, and after the corona, a large number of people bought agricultural land, and house prices jumped almost twice. "
There is also a great demand for cottages in Bosnia and Herzegovina, said Maho Taso, director of PROSTOR Real Estate. "This trend is already slowly declining, but it is certainly higher than last year."
"The fact that the sale of cottages jumped 40% in Serbia only confirms that this is a trip due to the inevitability and the current situation. And that trend will pass," Stanojevic agreed.
When it comes to foreign investors in Serbia, when asked if they have stopped during the previous six months, Ivan Gazdi?, partner, CMS Belgrade, says that everything depends on the sector in which the investor works. "Investments are significantly conditioned by the affinity and readiness of banks to finance projects. During these six months of the crisis, banks gave up financing the development of the hotel sector, but also the projects of business facilities in Belgrade. It seems that logistics has not been so affected, and investors still recognize this segment as a model where it is still profitable to invest. As for the retail sector, it would be said that retail parks were less affected than shopping malls, due to their very structure and the absence of a centralized climate. Although in the first rush the retail sector was directly affected by the closure, the recovery is happening to a greater extent than it is with office space, which will have to be transformed into a more flexible form in the long run because people still work from home. "
Gazdic also pointed out that the risk of uncertainty creates stricter financial conditions, and that some banks have increased the interest rate on housing loans, which is in conflict with the NBS's recommendations to make loans more accessible.
When asked whether it is a good investment to invest in real estate or keep money in a bank, all participants agreed that the population in the Balkans is investing in real estate, and that the advantage is mostly new construction.
"After the earthquake in Zagreb, new construction is even more popular, because previously there was no awareness of the uncertainty that exists," Vujovic points out. "New construction is more popular, but it is not enough and there are no large and luxurious projects. Certain projects are in the pipeline, so we have waiting lists for individual investors. The interest rate in the bank is negative, the annual return when buying real estate is 4%, so we save "in bricks" because we do not have education for saving in funds and in other ways, except by buying real estate. A large amount of money is being printed and the question is whether it is better to have money in physical form or a property in a good location that can be rented. "
As for Sarajevo, the demand for new construction is far above the supply. "Maintenance of buildings is an objective problem of old construction, so new construction, which is being built today in mostly worse locations, primarily on the periphery, still has an advantage. "The financial market is underdeveloped and still has negative connotations, so people invests in real estate, because there is no alternative," said Maho Tasso. "Buyers of new construction are willing to advance larger amounts for projects in conception, and a more well-known investor brings a higher response to the advance payment."
Buyers are much wiser today, Milos Stanojevic emphasized. "They are much more educated about the types and quality of facilities, the culture of investment maintenance. New construction does not imply quality. As an experienced company in the real estate market, we help our customers with adequate advice, because what is valued today is the quality of life. "
Referring to the growing number of foreign investors on the Serbian market, Ivan Gazdi? pointed out that investors usually divide the project into several phases. "In that situation, banks are interested in financing from the first phase onwards, depending on the results, which will provide guidelines for further development of the project." It seems to me that project financing has introduced better market discipline and security in our country as well, because an investor who plans to take project financing is familiar with what he has to do - to have a clean company that is only established for the development of that one project. At the same time, it is important that the location is clean because of the bank's loan, "said Gazdi?, who emphasized that the Foreign Investors Council had various proposals on how to recover the real estate market as soon as possible. "We sent a proposal to the ministry to reduce the amount of contributions for the arrangement of construction land, the amount of conversion of the right of use into the right of ownership on construction land, we proposed to allow construction based on the right of use in some 12 months, to allow registration of works before payment."
Talking about the fact that New Belgrade is currently in the lead with locations and whether some investors will return to the city center, where possible, Milos Stanojevic pointed out that New Belgrade as the largest business zone offers the greatest opportunities and will continue to hold the lead in squares under construction. "Dorcol and the lower part of the old part of the city will continue to develop, we have serious projects at locations in this part of Belgrade, but also the effort of the city administration to arrange that space, gives serious potential." Belgrade has other very interesting locations - such as certain locations in New Belgrade itself, such as the vicinity of the Hotel Yugoslavia, or in the area of the old part of the city of Marina Dorcol and the Port of Belgrade. Such locations will provide exactly what the mass market enjoys, and that is to have comprehensive, time-saving facilities, isolated from the city noise. Certainly, each city zone will have its own development," said Stanojevic.
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