With the average salary in Serbia, which is about 83,800 dinars (715 euros), a person can a housing loan of about 90,000 euros, and for that amount, according to the data from the 4zida website, they can buy an apartment of about 35 square metres in Belgrade, excluding the city centre.
The calculation shows that in the aforementioned case, about 60 percent of the buyer’s salary will go toward paying the monthly loan instalments which would amount to about 430 euros, with a 30-year repayment period.
Increasingly fewer people applying for housing loans
For almost every third apartment purchased in Serbia in the past three years, the buyer took a loan from the bank, while in the first half of this year, hardly every fifth apartment was purchased with the help of a loan.
The share of housing loans in real estate purchases dropped from 32 percent in 2020 to 28 percent last year, while in the period from January to late June this year, only 18 percent of purchased real estate was paid for via a loan.
Analysts say that purchasing an apartment via a loan is now becoming a difficult option as the apartment prices are going up and a buyer needs to deposit a 20% downpayment if buying the apartment with the help of a bank loan. Analysts also note that the sharp demand for apartments last year closed off the market for “ordinary people” even more, i.e. especially first-time buyers.
According to the data collated by the State Geodetic Institute (RGZ), the average price of a square metre of an apartment in a new building in Belgrade in the first half of the year was about 2,430 euros, which is almost three and a half average monthly salaries in Serbia.
This means that, in one year, an average Serbian citizen can buy only 3.5 square metres of real estate and that they need about 11 years in total to save for a 40-square-metre apartment. The RGZ data also showed that apartment prices in Serbia slowed down and stabilized in the second quarter.
Loans for downpayment too
Financial consultant and former president of the Association of Banks of Serbia, Vladimir Vasić, says that people are cautious about taking out loans and that analysts have projected that the share of apartments purchased via housing loans in the total number of purchased apartments will continue to decline.
“In the short term, this makes sense and it is good that it is only temporary. I hope that it will not affect the demand for loans much and that the situation in the global market will normalize until the end of 2024,” says Vasić and adds that the client’s creditworthiness also depends on their decision on what percentage of their salary they want to set aside for paying instalments, which, optimally, shouldn’t be more than 30%.
“When people borrow, they should always leave room for unforeseen situations and not borrow up to the upper limit. Some people have had their instalments increase by up to 40 percent due to the growing Euribor and they have found themselves in a problem. That is why it is important that future buyers never use the maximum credit potential”, Vasić points out.
Quite a few potential real estate buyers have problems with coming up with the 20% downpayment. For instance, the downpayment for a 50-square-metre apartment, sold at an average market price, is around EUR 20,000.
Vasić notes that often families take out a cash loan to cover the downpayment, while some have to save for years for the downpayment.
(Imovina.rs, 20.10.2023)
https://imovina.rs/istrazivanja/za-godinu-dana-zaradimo-za-tri-i-po-kvadrata-stana/381