After several years of living in a rented apartment in Novi Sad, Vladimir Beljić recently returned to his hometown of Smederevo – to his childhood room.
As a freelance artist, no longer able to afford rent, he had hoped that a subsidised housing loan for young people might help him buy a studio apartment.
At the beginning of 2025, at the height of student blockades and mass anti-government protests following the collapse of a canopy at the Novi Sad railway station, in which 16 people died, government representatives offered young people aged 20 to 35 favourable housing loans.
With a minimum deposit of one per cent, it was possible to take out a loan of up to €100,000, with low interest rates of 1.5 per cent for the first six years, according to the offer.
However, after speaking with the bank, Beljić realised that this was financially unsustainable for him.
As a freelance artist without permanent employment, he needed a guarantor, which in his case would be his mother, and it is impossible, he says, for her to set aside that much money each month for his apartment.
“We calculated that even if I bought an apartment, realistically it wouldn’t be possible to repay those €100,000 within six years, considering we live in Serbia.
“That would mean that after those six years, when the interest rate becomes standard, the monthly instalment would be around €400 for the rest of my life,” the 24-year-old adds.
He also says that bankers told him the loan “essentially does not differ in any way from a regular loan, except that you invest less money upfront for paperwork”.
“It really would mean a lot to me, but even my friends who are programmers and earn much more than I do haven’t dared to take this youth loan. If they don’t dare, how could I?” Beljić asks.
What has the response been?
In the first ten months – by the end of January 2026 – 5,247 loans were approved, according to the Ministry of Finance.
They do not have data on how many applications were rejected during the process, nor why applications are most often turned down, they added in a written response.
Nevertheless, they are satisfied with the response, which they claim has far exceeded expectations.
Most applications were submitted in Belgrade and Novi Sad, with Subotica, a city in the far north of Serbia, in third place.
In support of claims about the programme’s success, the Ministry also states that the initially planned €400 million was fully used in the first year, and that on 4 December 2025 a further €200 million was officially secured.
In the meantime, the law has been amended – expanding who can act as a guarantor, and allowing loans to be taken for the construction of prefabricated houses as well as auxiliary buildings, along with exemptions from certain fees and charges.
A populist idea
This is a populist idea intended to give voters the impression that the state cares about young people and wants to keep them in the country by using budget funds, says Danilo Šuković, an economist and member of the opposition Democratic Party.
“When something is paid for with other people’s money, and the sole purpose is political ratings, then the profitability of the project is completely irrelevant.
“Especially when public funds are already being spent in a completely non-transparent way,” says the former member of the Anti-Corruption Council.
Such arrangements are not common practice in the region or Europe, as many countries consider them unprofitable, he adds.
“Given that the project is fundamentally unsustainable, it cannot really be considered successful.
“Despite all the campaigns and propaganda, the response from young people is still very low,” Šuković notes.
What do young people who took out loans say?
When he heard about the loan, 29-year-old Petar Lazarević came up with a plan, although it seemed to him that it was introduced “to calm part of the electorate, as a form of propaganda”.
“I’ve always wanted to own an apartment,” says Lazarević, who lives in Belgrade.
Together with his brother Dimitrije, their mother, and even their grandmother, they had been saving for years to buy a property, and decided to take out a loan with as short a repayment period as possible.
That is a challenge, he says.
“It’s essential for the family to help with all of this. Property prices are too high; when you find something decent, you have to invest more to fix it up, and if you have nowhere to live at that point, it becomes very difficult,” he adds.
Although he managed to get an apartment, he would not recommend this loan to others.
“I’m constantly under pressure, calculating what to do next, because the instalment has to be paid. Honestly, this is a huge financial strain,” he says.
Bojan Terzić also took out a subsidised loan, having previously already paid a deposit for an apartment in Novi Sad. “Thanks to my grandfather’s inheritance, I took out a loan for an apartment with a similar monthly cost to renting. I paid a deposit at an early stage of a new-build project, and while waiting for the apartment to be completed, the option of a subsidised loan became available, for which I met the requirements. I decided to take the opportunity because I believe I’m entitled to it,” says the 35-year-old.
He believes these benefits are “an attempt by the authorities to ‘buy young people’” and that they were therefore introduced “at a time of major social unrest driven precisely by young people”.
The total amount repaid does not differ much from a regular loan, Terzić notes.
The advantages of buying an apartment with almost no deposit and six years of favourable interest “help many people escape a vicious circle”, he adds.
Young people cannot save for a deposit if they are paying rent, he points out, which is why for many, like him, “there is currently no better option”.
What are the loan terms and conditions?
There are several specific features compared to other similar loans, according to the Ministry of Finance website.
The programme applies to Serbian citizens residing in Serbia, aged 20 to 35 at the time of application, with a minimum deposit of one per cent. The maximum loan amount is €100,000, but there is no limit on the property price or price per square metre by city. Loans offer a one-year grace period. Repayment periods can be up to 40 years, but no later than the borrower’s 70th year of age. The loan includes a subsidised fixed interest rate of 1.5 per cent annually for the first six years, after which the rate becomes variable.
Some commercial banks state that the loan is available to young people buying their first home.
Applicants may be employed on permanent or fixed-term contracts, or unemployed, although in the latter case a family member’s guarantee is required.
Eligible residential properties include houses, apartments or parts of residential buildings intended for living, as well as garages or parking spaces (if purchased together with an apartment), and land with a building permit for house construction.
The required deposit is at least one per cent of the purchase price, although it can be higher.
Loan processing fees and certain other charges are waived, and early repayment is allowed in accordance with the bank agreement.
Some banks limit the maximum property price to €150,000.
Terzić says the process was quick, but believes this was mainly due to his specific situation, as he simply added an application for a subsidised loan while already applying for a standard one.
However, he waited weeks for certificates from the tax authorities, where, he says, “the system is disastrous”. “I knew I met all the conditions, I had been preparing for years, but I was still anxious until the very end of the process – fortunately, unnecessarily,” he says.
What would young people change in this process?
Petar Lazarević says he would first increase the loan amount, because at current prices the €100,000 limit “cannot secure a decent home”.
The average price of new-build housing in Serbia in the first half of 2024 was 215,481 dinars (approximately €1,800), but apartments in one of Belgrade’s central municipalities, Savski Venac, reached prices of 520,616 dinars (around €4,400) per square metre, according to the Statistical Office.
Vladimir Beljić, who has still not resolved his housing situation, suggests that the state should first regulate property prices, especially in large cities.
“I know many people who have reasonably well-paid jobs but simply cannot afford even to rent, let alone to buy. That’s why I think it would be more important to regulate the market than to introduce measures like this, which in fact help only a smaller number of people,” Beljić concludes.
(BBC Serbia, 25.03.2026)
https://www.bbc.com/serbian/articles/c9wn4jqdq4po/lat