Working day and night for a square meter of a child’s room. This is how Slavisa Kovjenic describes the way he can afford to buy an apartment in Banja Luka, where the average cost per square meter is about 3.500 BAM (1.750 euros).
With the salary Slavisa earns, he says he will have to work two jobs to buy his first property.
“My wife and I have similar salaries, and combined they amount to about 2.500 BAM per month (1.125 euros), but everything has become so expensive that our salaries together cannot even cover one square meter of an apartment. It covers maybe a little more than half a square meter,” says this thirty-year-old.
The average salary in both entities in Bosnia and Herzegovina (BiH), Republika Srpska (RS), and the Federation of BiH (FBiH), is around 650 euros. According to official statistics, it has increased by about 170 euros over the past five years, while the average price of apartments has jumped by almost 450 euros per square meter in the same period.
One square meter in Sarajevo up to 4.000 euros
In Sarajevo, the capital of BiH, the price per square meter of residential space ranges from 2.000 to 4.000 euros, according to real estate agencies.
According to the Federal Bureau of Statistics, the average price of newly sold apartments in Sarajevo at the end of last year was over 3.400 BAM per square meter (1.750 euros).
Real estate experts attribute the drastic increase in property prices to several factors, including the devaluation of money and economic uncertainty in the BiH market, leading citizens to view property purchases as a “safe form of savings.”
Dino Osmanbegovic, an economist and real estate expert, highlights that property prices in larger cities have been rising since the start of COVID-19, four years ago, when demand for real estate increased.
As another “turning point”, Osmanbegovic also assesses the events in the banking sector in BiH after the beginning of the Russian aggression against Ukraine in February 2022, when money was withdrawn from the banking sector.
“Banks continued to aggressively lend, increasing both non-purpose and housing loans. This is not inherently bad, but they did so at relatively low interest rates. This again signaled those who save or keep money in banks and do not achieve an adequate return through interest rates to enter the next cycle of seeking better investment opportunities, which again are real estate,” explains Osmanbegovic, Slobodna Evropa writes.
E.Dz.
