North Macedonia Residential Real Estate Market Analysis 2023

During 2022, the nationwide house price index soared by 20.67%, sharply up from y-o-y increases of 11.25% in 2021, 1.77% in 2020, 3.53% in 2019, and 1.62% in 2018, according to the National Bank of the Republic of North Macedonia, the country’s central bank. In fact, it was its best showing since 2008.

However when adjusted for inflation, house price growth is much more muted, increasing by just 1.62% in 2022 from a year earlier.

Quarter-on-quarter, nationwide house prices increased 4.78% in Q4 2022 (3.09% inflation-adjusted) – one of the biggest quarterly increase in the past decade.


Year Nominal Inflation-adjusted
2007 10.82 4.89
2008 24.95 18.82
2009 -7.91 -6.40
2010 6.19 3.14
2011 -1.51 -4.18
2012 -3.94 -8.30
2013 -3.09 -4.41
2014 -0.99 -0.41
2015 1.12 1.45
2016 1.30 1.60
2017 0.04 -2.34
2018 1.62 0.78
2019 3.53 3.08
2020 1.77 -0.47
2021 11.25 6.09
2022 20.67 1.62
Sources: National Bank of the Republic of North Macedonia, Global Property Guide

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 began.

The housing market, which has been sluggish since the global financial crisis, is one of the major beneficiaries.

After house price rises of 10.8% (4.9% inflation-adjusted) in 2007 and 25% (18.8% 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 own extended political crisis exacerbating the situation. The housing market showed significant improvements just recently, with house prices rising strongly by 11.25% in 2021 and by another 20.67% in 2022, buoyed by strong property demand both from local and foreign homebuyers.

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 2022, North Macedonia’s economy expanded by a modest 2.7% from a year earlier, following annual expansion of 4% in 2021 and a contraction of 6.1% in 2020, based on figures from the International Monetary Fund (IMF). The economy is expected to grow by 3% this year and by another 3.9% in 2024.

Though by European standards North Macedonia is a poor country, with a total population of about 2.1 million people and a GDP per capita of US$ 6,800 in 2022. 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 60,698 (US$ 1,073) per square metre (sq. m.). According to Immigrant Invest, the average price of a 100 sq. m. apartment increased to MKD6.04 million (US$106,773), from MKD4.68 million (US$82,803) five years ago.

By location:

  • In Skopje’s centre, the average price of dwellings is about MKD100,000 (US$1,768) per sq. m.
  • House prices in other parts of Macedonia is around 25% lower than the national average, at MKD75,000 (US$1,326) per sq. m.

Residential construction activity slowing

In the first eleven months of 2022, the number of buildings for which permits were issued in North Macedonia fell slightly by 1.8% y-o-y to 3,623 units, according to the State Statistical Office. This followed an annual growth of 43.3% in 2021 and a contraction of 3.7% in 2020.

Macedonia building permits

The Southeast region registered the biggest y-o-y increase in building permits of 28.3% in Jan-Nov 2022, followed by Polog (21.2%), Vardar (18.1%), the East (18.1%), Pelagonija (14.4%), and Southwest (6.7%).

Only Skopje and the Northeast saw annual declines of 34.4% and 36.2%, respectively.

Macedonia building permits

Skopje, the capital, accounted for almost one-fourths of all residential construction activity in the country in the first eleven months of 2022.

From 2008 to 2021, there were an average of 3,000 building permits issued annually in North Macedonia. Over the same period, the total number of completed dwellings averaged 5,500 units every year.

Mortgage interest rates remain low, despite rising key rate

The National Bank of the Republic of North Macedonia raised its key interest rate further by 50 basis points to 4.75% in December 2022, its eight consecutive rate hikes, in an effort to rein in heightened inflationary pressures. Since April 2022, the key rate was raised by a cumulative 350 basis points.

Macedonia mortgage insterest rates

Despite this, mortgage interest rates remain more or less steady. In November 2022, the average interest rate for new denar-denominated housing loans was 3.41%, up slightly from the previous year’s 3.28%, according to the central bank.

Over the same period:

  • Floating rate, or up to 1 year initial rate fixation (IRF): 3.54%, up from 3.33% a year earlier
  • 1-5 years IRF: 3.24%, slightly up from 3.13% a year earlier
  • 5-10 years IRF: 3.4%, almost unchanged from 3.36% a year ago
  • Over 10 years IRF: 3.4%, almost unchanged from 3.35% a year earlier

On the other hand, the average interest rate for new euro-denominated housing loans stood at 3.26% in November 2022, down from 3.39% the previous year.

  • Floating rate or up to 1 year IRF: 5.82%, up from 5.54% a year earlier
  • 1-5 years IRF: 3.44%, up from 3% a year earlier
  • 5-10 years IRF: 3.21%, down from 3.44% in the previous year
  • Over 10 years IRF: 3.1%, unchanged from a year earlier

Interest rates for outstanding housing loans continue to fall. In November 2022, the average interest rate for denar-denominated loans was 3.9%, slightly down from 4.01% in the same period last year. Likewise, the average interest rate for euro-denominated loans fell to 3.94%, from 4.2% a year ago.

Mortgage market growing strongly

Loans for house purchases increased 12.9% in November 2022 to MKD 75.02 billion (US$ 1.32 billion), following y-o-y growth of 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.

Macedonia housing loans

About 89.7% were denominated in foreign currency while the remaining 10.3% were in domestic currency.

In November 2022:

  • Denar-denominated housing loans increased 6.5% to MKD 7.76 billion (US$ 136.3 million).
  • Foreign currency-denominated housing loans rose by 13.7% y-o-y to MKD 67.26 billion (US$ 1.18 million).

Macedonia housing loans

From 2010 to 2021, the total value of housing loans rose by an annual average of 14%. As a result, the mortgage market expanded to more than 9% of GDP in 2022, more than double its size a decade ago.

Rental yields are moderate

Gross rental yields on apartments in Skopje range from 3.09% to 6.49%, with a city average of 5.28%, according to Global Property Guide research conducted in November 2022.

In Skopje’s center, the average rental yields for two-bedroom apartments was 5.88%; 4.43% in Aerodrom; 5.33% in Karposh; 5.08% in Kisela Voda; and 5.74% in Gaza Baba.

Two-bedroom apartments in Skopje can be rented out for around US$220 to US$340 per month.

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

Modest economic performance; falling unemployment

During 2022, North Macedonia’s economy expanded by a modest 2.7% from a year earlier, following annual expansion of 4% in 2021 and a contraction of 6.1% in 2020, based on figures from the International Monetary Fund (IMF).

Macedonia gdp inflation

“Just as the economy in North Macedonia started to recover from a pandemic-induced recession, and after a 4-percent growth in 2021, the energy crisis and the war in Ukraine cut the recovery short and amplified inflationary pressures in 2022,” said the World Bank.

The economy is expected to grow by 3% this year and by another 3.9% in 2024, based on the IMF projections.

Inflation stood at 14.2% in December 2022, a sharp slowdown from 19.5% in the previous month and from a record-high of 19.8% in October 2022, according to the State Statistical Office. Yet it remains far higher than the annual average inflation rate of just 1.6% registered from 2011 to 2021.

Unemployment continues to fall, although it remains very high by international standards. In Q3 2022, the nationwide unemployment rate fell to 14.3%, from 14.5% in the previous quarter and 15.7% in the same period last year.

Macedonia unemployment

North Macedonia had a total labor force of 808,328 people in Q3 2022, 115,266 of which were unemployed.

The jobless rate averaged 17.5% in 2018-21, a sharp improvement from an annual average of 25.8% in 2013-17 and 33.6% in 2000-12.

North Macedonia now a NATO member state; EU accession talks began

In recent years the country has been in a state of continuous crisis, after then 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 European Union (EU) and 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 now be called as 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 NATO accession agreement in 2019 and on March 27, 2020 became an official member state.

Then 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, it has made a number of 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.