Serbia’s house prices rose 6.4% over the six months to December 2010. The average price of new dwellings stood at RSD144,294 (USD1,913) per square meter, up 12% from a year earlier, according to the Statistical Office of the Republic of Serbia.
Belgrade has the country’s most expensive housing, at RSD191,650 (USD 2,538) per sq. m. in the first half of 2011, followed by Novi Sad, where the average price of new dwellings is RSD 109,375 (USD 1,449) per sq. m. Cuprija has the cheapest housing, at RSD 59,196 (USD 785) per sq. m.
The Serbian housing market has been flourishing for years, and from 2000 to 2010 house prices soared by 265%.
Serbians are now buying larger units. The average area of new dwellings sold in H1 2011 was 58 sq. m., up from 55 sq. m. in the same period in 2010.
Inflationary pressures are waning, and in August 2011 the National Bank of Serbia (NBS) lowered the key policy rate by 25 basis points to 11.5%.
Belgrade has the country’s most expensive housing, at RSD191,650 (USD 2,538) per sq. m. in the first half of 2011, followed by Novi Sad, where the average price of new dwellings is RSD 109,375 (USD 1,449) per sq. m. Cuprija has the cheapest housing, at RSD 59,196 (USD 785) per sq. m.
The Serbian housing market has been flourishing for years, and from 2000 to 2010 house prices soared by 265%.Serbians are now buying larger units. The average area of new dwellings sold in H1 2011 was 58 sq. m., up from 55 sq. m. in the same period in 2010.
Inflationary pressures are waning, and in August 2011 the National Bank of Serbia (NBS) lowered the key policy rate by 25 basis points to 11.5%.
Analysis of Serbia Residential Property Market »
RENTAL YIELDS
Last Updated: Mar 09, 2012
It is a mixed picture for property in Belgrade. Square metre prices of apartments in Belgrade have continued to fall. But there has been a recovery in rents and rental yields of apartments all throughout Belgrade, in comparison with the previous year.
Compared with last year’s data, apartment prices experienced an average price drop of 8%, with Vracar experiencing the highest price falls of 13%, while New Belgrade experienced the least, at 4%.
Rental returns however showed the opposite trend. Real estate investors in Belgrade have enjoyed an average 27% increase in rental yields compared with last year, and an average increase of 36% in rental income.
Investment apartments in Vracar and Stari Grad showed the most dramatic increase in rental income, earning as much as 44% more than last year’s rental income.
Dedinje and Senjak remain as the most expensive neighborhoods in Belgrade, with apartments selling from €1,900 to €2,300. This is followed closely by neighborhoods in Vracar and Stari Grad with average square metre prices of €2,064 and €2,030 respectively.
New Belgrade apartments achieved the highest rental return, reaching 6.79%. Square metre prices in New Belgrade range from €1,635 to €1,918, an average drop of 4% from last year’s €1,735 to €2,022. Average rental yields are moderately good, at 6.40%.
The cheapest apartments remain those in Vozdovac and Zvezdara, with average square metre prices of €1,654.
Compared with last year’s data, apartment prices experienced an average price drop of 8%, with Vracar experiencing the highest price falls of 13%, while New Belgrade experienced the least, at 4%.
Rental returns however showed the opposite trend. Real estate investors in Belgrade have enjoyed an average 27% increase in rental yields compared with last year, and an average increase of 36% in rental income.
Investment apartments in Vracar and Stari Grad showed the most dramatic increase in rental income, earning as much as 44% more than last year’s rental income.
Dedinje and Senjak remain as the most expensive neighborhoods in Belgrade, with apartments selling from €1,900 to €2,300. This is followed closely by neighborhoods in Vracar and Stari Grad with average square metre prices of €2,064 and €2,030 respectively.
New Belgrade apartments achieved the highest rental return, reaching 6.79%. Square metre prices in New Belgrade range from €1,635 to €1,918, an average drop of 4% from last year’s €1,735 to €2,022. Average rental yields are moderately good, at 6.40%.
The cheapest apartments remain those in Vozdovac and Zvezdara, with average square metre prices of €1,654.
TAXES AND COSTS
Last Updated: Sep 21, 2011
Rental Income: Net rental income earned by nonresidents is taxed at a flat rate of 20%, withheld by tenant.
Capital Gains: Capital gains tax in Serbia is imposed at flat rate of 20%.
Inheritance: First degree relatives (spouse, children, and parents) are exempt from inheritance tax.Inheritance tax for other beneficiaries is imposed either at 2% or 2.5%.
Residents: Residents are taxed on their worldwide income at different rates, depending on the type of income. Supplementary income tax is levied if the resident’s taxable income exceeds a certain threshold.
Capital Gains: Capital gains tax in Serbia is imposed at flat rate of 20%.
Inheritance: First degree relatives (spouse, children, and parents) are exempt from inheritance tax.Inheritance tax for other beneficiaries is imposed either at 2% or 2.5%.
Residents: Residents are taxed on their worldwide income at different rates, depending on the type of income. Supplementary income tax is levied if the resident’s taxable income exceeds a certain threshold.
BUYING GUIDE
Last Updated: Apr 12, 2007
Roundtrip transaction costs, i.e., the total cost of buying and selling a property, are around 8% - 9% of the property value. Transfer tax is around 5% of the property value. The real estate agent’s commission is about 3%. However, newly built dwellings attract 8% VAT instead of transfer tax, bringing transaction costs up.
LANDLORD AND TENANT
Last Updated: Dec 31, 1969
Tenancy laws
Research is ongoing.
ECONOMIC GROWTH
Last Updated: Oct 01, 2011
Serbian economy recovering slowly
After Montenegro voted for independence in 2006, the Union of Serbia and Montenegro was officially dissolved. The Union was the last remnant of the former Yugoslavia, which once included Bosnia and Herzegovina, Croatia, Macedonia, Montenegro, Serbia and Slovenia.Serbia’s long history of conflict and revolutions, however, is far from over. Kosovo in south western Serbia is still fighting for independence. Kosovo is currently administered by the United Nations after violence flared up in 1998. UN-sponsored talks on the status of Kosovo are continuing.
Hit by the global financial crisis, the Serbian economy contracted 3% in 2009. The economy rebounded in 2010 with real GDP growth rate of 1.8%, fuelled by increased private sector investment, exports and consumption. The International Monetary Fund (IMF) forecasts growth of 2% in 2011, and 3% in 2012.
In January 2009, Serbia and the IMF entered into a Stand-By Agreement (SBA) loan of SDR 350.8 million (€409.5 million) to refinance Serbia’s debt. Then in August 2011, the IMF approved another SDR 935 million (€ 1.0 billion) loan to support economic programs and structural reforms.To secure the loans, Serbia agreed to cap its fiscal deficit to 4.5% of GDP in 2011 and 4% of GDP in 2012. This will mean deep cuts in subsidies, net lending operations, and non-priority spending on capital and goods and services.
There are still harsh memories of the hyperinflation period after the disillusion of Yugoslavia, when prices rose 5 quadrillion percent (5 with 15 zeroes after it) between October 1993 and January 1995.
Hyperinflation subsided when Serbia adopted the Deutschemark as an official currency in 1995 alongside the dinar. However, inflation still averaged 40% p.a. from 1995 to 2000.
From 2002 to 2009, the country reduced inflation to an average of 9.9% per year. Serbia’s inflation rate is expected to rise to 11.25% in 2011, from just 6.1% in 2010. At end-June 2011, the inflation rate was 12.5%, according to the National Bank of Serbia
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