The offer of apartments in Bosnia and Herzegovina is not commensurate with the price, say real estate agents. There are fewer and fewer quality apartments on the market, and prices have risen to record levels. Real estate has become hard to come by for the average pocket, it is likely that prices will not fall for a long time.
Prices rose by 40 percent
The price of an apartment in a new building in Mostar has increased from 2,500 marks per square meter in 2021 and 2022 to 4,000 marks this year, says the owner of Smart Real Estate from Mostar, Selma Elezović. As she adds, the price of apartments in old buildings has increased proportionally.
“The price of a square meter for an apartment in an old building, which does not require additional investment, is from 2,500 to 2,700 marks. The price of course depends on the location and many other elements, but the highest price for a square meter apartment in an old building is up to 2,700 or 2,800 marks,” she explained.
From the Area Real Estate Sarajevo agency, which is mainly focused on the sale of apartments in the Municipality of Centar Sarajevo, they say that the price of an apartment in a new building was around 6 and a half thousand marks per square meter.
“However, we are now selling Park Residence where the prices are even 9 thousand per square meter. The old building was somewhere around 4 thousand, but lately the situation on the market has been disturbed. People ask for big figures for old buildings and for unrenovated apartments. The difference between the old construction and the new construction does not seem to exist, but essentially it exists in quality. It happens that there is a lot of offer on the market, and the offer is not commensurate with the price,” explained the real estate agent from the Area Real Estate agency.
She believes that the prices of apartments in old buildings will have to be reduced, and that new buildings will probably remain the same, if not more.
For example, as he states, a 50-square-meter apartment in Grbavica, which cost 150,000 marks in 2021, now costs 230,000 marks. As he added, the prices have increased by 40 percent, but it is still in the range where people are willing to buy it and what they can afford.
And the prices of apartments in Banja Luka have gone quite high compared to last year. Stanislava Ligka from the real estate agency Saga International Banja Luka Feni said that a trend of rising prices has developed, although prices are constantly being announced to fall in this city.
“Perhaps in the last few months, some stagnation can be felt, but there is still no talk of a drop in prices. Prices are different in different parts of the city. When we talk about new construction, they range from 2,500 to 8,000 marks in the city center. There are quite a few old buildings on sale and on offer, people generally don’t decide to sell old buildings, if they don’t have to,” she pointed out.
A good value-for-money ratio has to be looked for longer
Selma Elezović says that in Mostar the demand is greater than the supply.
“Now we have properties that are being built and that are announced to be built, and there is a huge demand, there are a lot of inquiries. When it comes to old apartments, there is not really a big offer,” she believes.
This year there was a lot of demand and interest in Sarajevo as well, says an agent from the Area Real Estate agency. He adds that there is everything on the market, but that there are not many good properties. He points out that a good value-price ratio has to be searched for a little longer.
In Banja Luka, as Stanislava Ligka adds, there are new apartments, although not all of them are ready for immediate occupancy. She explains that these are more apartments under construction that will be habitable next year, and currently the demand for habitable apartments is somewhat higher.
The diaspora keeps real estate prices high
The market in Sarajevo always drops a bit in the winter, says an agent from the Area Real Estate agency. In that period, sales are slightly lower because there is less diaspora. As he explains, the diaspora in Sarajevo is not the primary customer, but it is significant and cannot be ignored.
On the other hand, Selma Elezović from Mostar says that the diaspora does not buy so often that it could be said that they are percentage-wise bigger buyers compared to people living in Bosnia and Herzegovina.
Stanislava Ligka from Banja Luka says that there are young people who solve their housing problem and buy apartments.
“These are local people who are mostly looking for smaller apartments, for which they can get loans. These are apartments up to some 150 thousand marks and 45 square meters. Of course, you can’t do without the diaspora. They keep our real estate prices so high,” she believes.
Young people buy apartments up to a maximum of 80 square meters
Area Real Estate Sarajevo explains that until recently it was very convenient to take out a loan, so young people were able to get their apartments more easily.
“You could take a 2.99 fixed interest rate, 15 year home loan, and that was advantageous because inflation eats up that interest rate. Now the banks are raising interest rates and this will certainly affect purchasing power. No one will get involved in that type of investment so easily,” she points out.
She explains that young people mostly go into debt, take out loans and buy apartments of 50 to 80 square meters maximum.
“Mostly smaller apartments are bought now and there are always such apartments, but they sell very quickly. But they are also on the price now. The canton gives subsidies to young people, so that’s easier too. Real estate prices increased by 40 percent, and the subsidy by 2,000 marks. It’s great that there are any at all, but the prices have gone up terribly and disproportionately,” points out the agent from Sarajevo.
Stanislava Ligka from Banja Luka states that real estate prices in the last ten years do not reflect the state of our economic opportunities.
“I think we rely a lot more on the diaspora, on money that comes from outside. It is impossible to say that anyone here is able to pay such figures. There are probably some of them, but not enough for this state of affairs to be maintained for this long. But a huge number of our people live abroad and invest here. Every summer, spring and winter before the holidays, when they come, you can feel the money that comes from abroad. I think that the situation will be like this for at least some time,” concluded Ligka.
Apartment rent up to one thousand marks
When it comes to long-term apartment rentals, Selma Elezović from Smart Nekretnine from Mostar says that rental prices have increased significantly compared to the situation until 2020.
As she said, rental prices depend on the condition of the apartment and location, and range from 500 to 1,000 marks per month.
“Apartments that we used to rent for 300 or 400 marks are almost no longer available. Prices have increased and there is demand for rent, but only when it comes to apartments. As for business premises, unfortunately, we are not optimistic and our agency did not notice that there is a great demand,” she concluded, Federalna reports.
