The ratio between property prices and average wages in Serbia in the first half of the year is the best it has been in the last two decades. However, that doesn’t mean that it’s good.
On the contrary, it takes a Serbian citizen, earning the average salary, 14.1 years to earn enough money to purchase of a 60-square-metre apartment in a new building provided they put an entire salary aside for the apartment.
Only a decade ago, however, we had to work 20.4 years to buy an apartment of the mentioned size, warns the Foundation for the Development of Economic Sciences of the Faculty of Economics in Belgrade. By the way, the average price of a square metre of residential space in Serbia is 166,764 dinars, and the June salary was 59,740 dinars.
“Of course, these figures differ from city to city; it takes 15.5 years in Belgrade, 13.8 years in Vrnjačka Banja, 11.5 years in Novi Pazar, and just over ten years in Užice, Kragujevac, Čačak and Novi Sad to purchase a 60sqm apartment ”, explains Aleksandar Radivojević.
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The reason for the decrease in the years of work required to purchase a 60-sqm-apartment is the higher growth of the average salary compared to the average price of apartments. The average net salary in Belgrade, in the last year and a half, has in fact increased by 21%, in Novi Sad, by 22%, Kragujevac, Kraljevo, Vršac, Subotica, Čačak and Užice by 17%. Over the same period, average apartment prices in the cities recorded a single-digit percentage increase, while in some towns they were stagnating and in some, like Vršac, they declined.
However, the fact that the average official salary is growing at this rate does not inspire hopes that apartment prices will fall. A significant drop in prices should not be expected, analysts say, even in the midst of the pandemic.
“The mortgage market is currently very favourable and some banks have reduced the required mortgage downpayment. The number of building permits issued for the construction of new apartments in July 2020 was 35% lower than in July 2019. And if there is a further reduction in housing construction, with favourable loans and net wage growth, the market will inevitably react by increasing housing prices, ” Radivojević underlines.
(Vecernje Novosti, 22.09.2020)
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