Will the price of square meter continue to rise?

Will the price of square meter continue to rise?

Dejan Ili?, CFO iof West Properties - Interview for Real Estate magazine

 

Whether the Serbian real estate market has reached the maximum is one of the most common questions that can be heard lately. Evident price increase for several years, as well as official data that the prices of new buildings in Serbia in the previous year increased by 12.8 percent compared to 2017, or by 14.7 percent in Belgrade, where this year the square in some parts of the city reached and a staggering 5,000 euros, they are suspicious that we are approaching the market collapse scenario of ten years ago.

"According to the data we have large projects have not yet satisfied the demand for real estate in our market, which is certainly one of the factors that influence the growth of the price of the square," says Dejan Ili?, financial director of West Properties. "There is a noticeable trend among investors who increase construction quality every year, as well as the quality of accompanying services, content and technical solutions, which also contributes to price increases."

As our counterpart explains, prices are diverse, and different factors determine buyers for the purchase of a particular property. "Buyers are mostly citizens who want cheap housing loans and a stable dinar exchange rate to solve their housing issues. However, it is not negligible either the number of buyers who buy real estate from their own funds, and this is mainly in exclusive locations, "Ilic noted. Belgrade, as the regional center of this part of Europe, is increasingly aroused by the interest of foreign investors. New construction is still the most sought after, as well as the type of modern complexes that offer their content a higher level of quality of life. Additionally, the demand for new construction is affected by the possibility of VAT refunds for those who meet the conditions.

Bearing in mind the interest of customers, Ilic does not expect significant changes in the market trends in recent times. "If we look at projects that West Properties, as an exclusive sales representative, is preparing at this moment and whose sales will begin in the coming months, as well as the number of investors we are currently negotiating with, we can conclude that certain locations in Belgrade will only start to evolve. However, in a strong market game, it is important for customers to offer a project that will respond to all their demands for modern housing. This is precisely the importance of real estate companies, such as West Properties, which provides key information to investors on their best-of-the-art location, financial feasibility and cost-effectiveness analysis, project management during the construction process up to the provision professional management services of the real estate and the process of its maintenance, "says Ilic, who still has 16 years of experience in banking, where he dealt with corporate and project finance, in which he collaborated with investors and gained know-how related to the processes and problems of financial , the regulatory and execution aspects of the construction itself. In West Properties, he is in charge of investor and bank relations, project management for investors and developers, site development and project budgeting.

Asked when the saturation of the market can be expected, Ilic points out that everyone, even the real estate market, has its own cyclicality. "What no one points out is that every market contraction carries a more intense economic growth, which compensates for its effects of losses that have arisen in the crisis. Today, the price of a square is worth more than it was worth before and after 2008. So, in the long run, we are in the plus again. Fears that occur in that sense are greater, it seems, from the effects that can happen, "Ilic concludes.

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