North Macedonia's Residential Property Market Analysis 2025

North Macedonia's housing market remains strong amidst robust demand and increasing residential construction activity, coupled with improving overall economic conditions.

Table of Contents

• Housing Market Snapshot
• Supply Highlights
• Rental Market
• Mortgage Market
• Socio-Economic Context

Housing Market Snapshot

During the fourth quarter of 2024, the nationwide house price index rose strongly by 10.55%, following year-on-year increases of 7.98% in Q3, 11.45% in Q2, and 4.61% in Q1, according to the National Bank of the Republic of North Macedonia, the country's central bank. House prices have been continuously increasing since Q1 2018 and have accelerated in the past three years.

North Macedonia's house price annual change

When adjusted for inflation, house price growth is much more muted, increasing by 5.91% in Q4 2024 from a year earlier.

Quarter-on-quarter, nationwide house prices were up by a modest 3.29% in Q4 2024 (2.71% inflation-adjusted), in contrast to the previous quarter's 0.3% decline and an improvement from the prior year's meager growth of 0.88%.

The government's decision to officially change the country's name from "Macedonia" to "North Macedonia" under the name deal with Greece in 2019 solved the long-standing dispute between the neighboring countries and opened the way for NATO and EU integration. North Macedonia became an official member state of NATO on March 27, 2020, and its EU accession talks have finally begun.

The housing market, which has been sluggish since the global financial crisis, is one of the major beneficiaries. House prices have been growing strongly since, increasing by double-digit figures in 2021, 2022, and 2024.

After house price rises of 10.8% (5.3% inflation-adjusted) in 2007 and 24.5% (18.4% inflation-adjusted) in 2008, Macedonia's housing market has shown unimpressive performance since, mainly due to the global financial meltdown, the problems with neighboring Greece, and its extended political crisis exacerbating the situation. The housing market showed significant improvements just recently, with house prices rising strongly by 11.3% in 2021 and by another 20.5% in 2022, buoyed by strong property demand from both local and foreign homebuyers. House price growth remains robust in the succeeding two years, increasing by an annual average of 8.7% in 2023-24.

Foreign individuals can freely buy apartments and buildings, subject to the reciprocity rule and approval from the Ministry of Justice.

Foreign citizens and companies can directly own land for construction in Macedonia under the Law on Construction Land adopted in 2008. Under the law, the construction land is sold through a public tender procedure. Also, foreign individuals and companies can lease land for up to 99 years through a public bidding process.

During 2024, North Macedonia's economy was estimated to have expanded by a modest 2.3% from a year earlier, following annual growth of 1% in 2023, 2.2% in 2022, and 4.5% in 2021 and a pandemic-induced contraction of 4.7% in 2020.

The economy is expected to grow by 3.6% this year and by another 3.8% in 2026, based on a forecast released by the International Monetary Fund (IMF).

Though by European standards, North Macedonia is a poor country, with a total population of about 1.8 million people and a GDP per capita of about US$8,700 in 2024. Corruption is rife. There is much emigration. A large proportion of the population lives in poverty, especially ethnic Albanians, who are simultaneously derided as "lazy" and discriminated against.

House price variations

Currently, the average dwelling price in North Macedonia is MKD 72,000 (EUR 1,170) per square meter (sq. m). The average price of a 100 sq. m. apartment increased to MKD7.1 million (EUR115,387) from MKD4.68 million (EUR 76,058) seven years ago.

By location:

• In Skopje, the average price of a three-bedroom apartment is about MKD 7.3 million (EUR118,638). In the city center, the same apartment costs MKD 13.8 million (EUR 224,275).
• In Ohrid, a three-bedroom apartment is sold for around MKD 5.1 million (EUR 82,884).
• House prices in other parts of Macedonia are around 25% lower than the national average, at MKD 5.3 million (US$86,134).

Supply Highlights:

Residential construction activity continues to increase

During 2024, the total number of dwellings for which building permits were issued in North Macedonia increased by 6.4% y-o-y to 8,367 units, according to the State Statistical Office. This followed an annual growth of 12.3% in 2023 and a huge contraction of 41.4% in 2022.

Though there was a wide regional variation.

• In Skopje, dwelling permits rose by 6.8% y-o-y to 3,310 units during 2024, following a 23.8% surge in the prior year.
• In Vardar, dwelling permits plummeted by 60.2% y-o-y to 277 units last year, in contrast to an increase of 79.4% in 2023.
• In the East, permits were up by 22.5% to 583 units in 2024 from a year earlier, following an increase of 18.1% in 2023.
• In the South-West, dwelling permits rose by 10.7% y-o-y to 1,419 units in 2024, following a surge of 66.3% in the prior year.
• In the South-East, dwelling permits plunged by 34.7% y-o-y to 750 units in 2024, in contrast to a strong growth of 55.3% in 2023.
• In Pelagonija, the number of dwelling permits rose strongly by 86.1% y-o-y to 657 units last year after declining by 14.7% in 2023.
• In Polog, dwelling permits soared by 57.9% y-o-y to 1,214 units in 2024, in stark contrast to the annual contraction of 53.3% in 2023.
• In the North-East, dwelling permits almost quadrupled to 157 units in 2024 as compared to the previous year, fully offsetting the decline of 70.6% in 2023.

Skopje, the capital, accounted for nearly 40% share of all residential construction activity in the country last year.

From 2010 to 2023, there was an average of 3,112 building permits issued annually in North Macedonia. Over the same period, the average number of residential dwelling permits was 6,971 units, while completed dwellings averaged 5,675 units every year.

During 2024, there were 3,521 building permits issued, down by 10.5% from the previous year but still up by 13% compared to the 2010-2023 annual average, based on figures from the State Statistical Office.

Mortgage Market:

Mortgage interest rates are falling gradually

The National Bank of the Republic of North Macedonia slashed its key interest rate by 20 basis points to 5.35% in February 2025, its fourth consecutive rate cut in six months.

"Such change of the monetary policy setup reflects the favorable trends in inflation and foreign reserves, amid still present and more pronounced risks related to the external environment," said the central bank. "In addition, there are risks of domestic factors that affect the aggregate demand. As for the external risks, the announcement of new protectionist measures could repeat the global inflationary pressures. The volatility of commodity markets is also evident, due to unstable geopolitical context and climate factors."

The interest rates on overnight and 7-day deposit facilities were kept unchanged at 3.95% and 4.00%, respectively.

With this, mortgage interest rates are gradually falling. In December 2024, the average interest rate for denar-denominated new housing loans was 3.5%, down from 3.83% in the previous year but still slightly higher than the 3.42% two years ago, according to the central bank.

By initial rate fixation (IRF):

• Floating rate, or up to 1-year IRF: 3.78%, slightly down from 3.87% from a year ago but up from 3.54% two years earlier
• 1-5 years IRF: 3.22%, lower than the 3.52% a year earlier and 3.31% two years ago
• 5-10 years IRF: 3.55%, down from 3.95% a year ago but still up from 3.36% two years earlier
• Over 10 years IRF: 3.69%, down from 3.95% in the previous year but still up from 3.33% two years ago

On the other hand, interest rates for euro-denominated new housing loans are more erratic. In December 2024, the average interest rate on these loans stood at 3.84%, slightly up from 3.75% in December 2023 and from 3.4% in December 2022. Over the same period:

• Floating rate or up to 1-year IRF: 3.9%, down from 4.08% in the previous year and 5.82% two years ago
• 1-5 years IRF: 3.19%, down from 5.18% a year earlier and from 3.62% two years ago
• 5-10 years IRF: 3.53%, down from 3.84% in the previous year but still up from 3.26% in the past two years
• Over 10 years IRF: 4.85%, sharply up from 2.6% in the same period last year and 3.25% two years ago

Interest rates for outstanding housing loans are more or less steady. In December 2024, the average interest for denar-denominated outstanding housing loans was 4.09%, slightly down from 4.13% in the previous year but still up from 3.9% two years ago. Over the same period, the average interest rate for euro-denominated loans was 4.08%, slightly down from 4.22% in December 2023 but still up from 3.93% in December 2022.

Mortgage market continues to grow strongly

During 2024, loans for house purchases increased strongly by 12.5% y-o-y to MKD 94.4 billion (EUR 1.54 billion), following annual expansions of 10.5% in 2023, 12.7% in 2022, 15.5% in 2021, 13.6% in 2020, 12.7% in 2019 and 15.2% in 2018, according to the National Bank of the Republic of North Macedonia. It is now the biggest amount of housing loans recorded in the country's history.

About 93.4% were denominated in foreign currency, while the remaining 6.6% were in domestic currency.

During 2024:

• Denar-denominated housing loans fell by 6.7% to MKD 6.26 billion (EUR 101.78 million).
• Foreign currency-denominated housing loans rose by 14.2% y-o-y to MKD 88.14 billion (EUR 1.43 million).

From 2010 to 2024, the total value of housing loans rose by an annual average of 13.5%. As a result, the mortgage market expanded to around 10.5% of GDP in 2024, more than double its size a decade ago. Yet, it remains very low when compared to international standards.

Rental Market:

Rental yields are moderate to good

Gross rental yields on apartments in North Macedonia are moderately good at an average of 6.47% in Q1 2025, higher than the 6% recorded in the same period last year, according to Global Property Guide research conducted in February 2025.

In Q1 2025:

• In Skopje, apartments offer rental yields ranging from 4.29% to 9.08%, with a city average of 6.71%. This is higher than the city average of 5.37% seen in the previous year.
• In Bitola, gross rental yields for apartments range from 5.33% to 7.5%, with a city average of 6.35%. This is slightly lower than the city average of 6.63% recorded in Q1 2024.
• In Štip, rental yields range from 6% to 6.69% in Q1 2025, with a city average of 6.34% - slightly higher than the 6.25% registered in the same period last year.

Two-bedroom apartments in Skopje's central districts can be rented out for around MKD 21,500 (EUR 350) per month, according to Global Property Guide.

There is no rent control in North Macedonia; rent is determined by the market.

Socio-Economic Context:

Economy improving; inflation rising again

During 2024, North Macedonia's economy grew by a modest 2.2% from a year earlier, following annual expansions of 1% in 2023, 2.2% in 2022, and 4.5% in 2021 and a pandemic-induced contraction of 4.7% in 2020, based on figures from the International Monetary Fund (IMF).

The economy is expected to strengthen in the medium term, with the World Bank projecting an annual average real GDP growth of 2.7% in the next two years.

"The medium-term outlook remains positive, but risks are tilted strongly to the downside. Growth is expected to step up in the medium term to an average of 2.7% during 2025-2026. This projection assumes a rebound of public investments and a gradual recovery of consumption and exports," said the World Bank.

The IMF is more optimistic, with its latest economic growth forecast for North Macedonia at 3.3% this year and another 3.8% in 2026.

"Growth is gaining momentum. After picking up in early 2024, growth is expected at 3.3 percent in 2025, driven by stronger domestic demand as public investment projects (including the Corridor 8/10d road project) intensify and consumption is supported by government transfers and real wage growth," said the IMF. "The impact of weak external demand seen in 2024 is expected to persist in 2025, driven by structural shifts in the European automotive sector."

However, inflation is increasing again. In January 2025, nationwide inflation reached 4.9%, up from 4.4% in the previous month and the highest level since September 2023. The increase was primarily driven by a surge in transport costs, coupled with higher prices for housing, water, electricity, gas, and other fuels.

From an annual average of just 1.4% from 2010 to 2020, inflation increased to 3.2% in 2021. It accelerated to 14.2% in 2022 and remained high at 9.4% in 2023. Inflation reached a record high of 19.8% in October 2022. Overall inflation eased to about 3.5% last year.

Unemployment continues to fall, although it remains very high by international standards. In Q3 2024, the nationwide unemployment rate stood at 12.3%, down from 12.5% in the previous quarter and 12.8% in the same period last year. It is now the lowest jobless rate recorded in the country's recent history.

North Macedonia had a total labor force of 796,700 people in Q3 2024, 98,300 of whom were unemployed.

The jobless rate averaged 15.7% in 2018-24, a sharp improvement from an annual average of 25.8% in 2013-17 and 33.6% in 2000-12.

Name dispute with Greece reignited, threatening EU accession talks

In recent years, the country has been in a state of continuous crisis after the Macedonian opposition leader, Zoran Zaev, released what he has called information "bombs" against the government.

Zaev accused the former government of systematically wiretapping all important people in the country and released a series of allegedly wiretapped conversations of the then-prime minister, Nikola Gruevski, the head of the secret service, and other senior officials, in which they apparently discussed interference in the judiciary, media, and urban-planning process.

Zaev claimed that the elections of April 2014, in which the ruling conservative VMRO-DPMNE party of Gruevski defeated Zaev's ex-communist Social Democrats (SDSM), were fraudulent and has accused Gruevski of operating a dictatorship. Zaev's party tends to represent ethnic Albanians.

Gruevski, who had been prime minister since 2006, resigned in January 2016 to pave the way for early elections, initially scheduled for February before being postponed until June 5, and finally to December 2016. A highly controversial presidential amnesty for 56 of those subject of investigations into the alleged wiretappings was issued by then president Gjorge Ivanov, with the obvious intention of aborting the judicial investigations and hiding any evidence.

Mass protests erupted in Skopje. Zaev and 10 other politicians who have received amnesties have refused them, and foreign institutions have condemned them.

The December 2016 general elections failed to produce an outright winner, and months of tension over the formation of a new government ensued. Finally, in May 2017, a new government was formed, with Zoran Zaev as the country's new prime minister. Zaev promised to boost the economy, address political divisions and tense relations between ethnic Macedonians and ethnic Albanians in the country, and finally resolve the country's dispute with Greece over its name - a vital step for Euro-Atlantic integration.

A dispute with Greece over Macedonia's name had blocked the country's accession to the European Union (EU) and the North Atlantic Treaty Organization (NATO). However, the change of government has changed the picture, with Zaev indicating Macedonia's willingness to compromise to resolve the issue. PM Zaev also announced that Skopje's airport will no longer bear the name Alexander the Great, nor will the motorway leading to Greece, which will now be called Friendship Highway.

Then, in June 2018, the government decided to enter into a new agreement with Greece, officially changing its name from "Macedonia" to "North Macedonia" to resolve the decades-long name dispute, paving the way for the country to start accession talks with NATO and the EU. In 2019, the name change came into force after ratifications by Greek and Macedonian parliaments.

During the 2019 presidential election, Stevo Pendarovski of the Social Democratic Union of Macedonia and the Democratic Union for Integration defeated the nationalist candidate Gordana Siljanovska-Davkova.

North Macedonia signed the NATO accession agreement in 2019 and, on March 27, 2020, became an official member state.

Then in July 2022, North Macedonia's parliament accepted a French proposal aimed at settling its dispute with Bulgaria and clearing the way to long-overdue EU membership talks. In the past years, Bulgaria has been blocking North Macedonia's efforts to join the EU, accusing it of disrespecting historical and cultural ties. To remove Bulgaria's veto against North Macedonia's accession talks, they have made several demands, including the acceptance that the language of North Macedonia is derived from Bulgarian and the recognition of a Bulgarian minority in the country, which requires an amendment to the Macedonian Constitution.

However, there has recently been resistance to amending the national constitution to recognize the Bulgarian minority.

During the 2024 presidential elections, nationalist Gordana Siljanovska-Davkova defeated incumbent Pendarovski, becoming North Macedonia's first female president. Backed by VMRO-DPMNE, she won nearly 65% of the vote.

The country's long-standing name dispute with Greece has resurfaced, threatening its EU accession. During her inauguration, Siljanovska-Davkova referred to the country as simply "Macedonia," prompting Athens to warn it may withhold ratification of key parts of their landmark 2018 agreement.

Sources:

• Basic Economic Data and Residential Real Estate Prices (National Bank of the Republic of North Macedonia): https://www.nbrm.mk/
• Construction (State Statistical Office): https://www.stat.gov.mk/
• Issued building permits, December 2024 (State Statistical Office): https://www.stat.gov.mk/
• Completed construction works and completed dwellings in housing units built by private owners, 2023 (State Statistical Office): https://www.stat.gov.mk/
• North Macedonia's central bank cuts GDP growth projections for 2024, 2025 (IntelliNews): https://www.intellinews.com/
• Cost of Living in North Macedonia (Wise): https://wise.com/
• Real estate investment in North Macedonia (Immigrant Invest): https://immigrantinvest.com/
• Regular meeting of the Monetary Policy Executive Board (National Bank of the Republic of North Macedonia): https://www.nbrm.mk/
• North Macedonia Interest Rate (Trading Economics): https://tradingeconomics.com/.
• Monetary and Interest Rates Statistics (National Bank of the Republic of North Macedonia): https://nbstat.nbrm.mk/
• Gross rental yields in North Macedonia: Skopje and 2 other cities (Global Property Guide): https://www.globalpropertyguide.com/
• Consumer Price Index and Retail Price Index, January 2025 (State Statistical Office): https://www.stat.gov.mk/
• Republic of North Macedonia: At a Glance (International Monetary Fund): https://www.imf.org/
• Active population in the Republic of North Macedonia, III quarter 2024 (State Statistical Office): https://www.stat.gov.mk/
• North Macedonia: Recent Economic Developments (The World Bank): https://www.worldbank.org/
• North Macedonia: Staff Concluding Statement of the 2025 Article IV Mission (International Monetary Fund): https://www.imf.org/.
• World Bank revises up North Macedonia's growth forecast (MIA): https://mia.mk/
• Azeski: Economic growth in North Macedonia in 2025 highly uncertain, regional cooperation is key (Kosovo Online): https://www.kosovo-online.com/
• Labour market (State Statistical Office): https://www.stat.gov.mk/
• North Macedonia Unemployment Rate (Trading Economics): https://tradingeconomics.com/
• North Macedonia country profile (BBC News): https://www.bbc.com/
• EU Accession Still A Way Off For North Macedonia (BMI): https://www.fitchsolutions.com/
• North Macedonia name dispute reignites spat with Greece (DW): https://www.dw.com/