In the last few years, it has become extremely difficult and almost unaffordable to buy an apartment in Sarajevo. The trend of renting apartments instead of buying them has long been present in Europe and the United States (U.S.), and it seems that it has now reached us as well.
Real estate prices in Sarajevo are constantly on the rise, so in some attractive locations, they go up to 8.000 BAM per square meter.
One of the key factors that further raise real estate prices in Sarajevo is the presence of immigrants from the diaspora and other parts of the region. These people buy apartments in the city, creating greater demand, although they often do not spend most of the year in Sarajevo. In this way, additional pressure is exerted on the real estate market and makes it more challenging for the local population.
The key problem is the lack of investors and insufficient construction that cannot keep up with the growing demand. If the supply were higher, it would reduce the pressure on real estate prices.
The average price of an apartment of 70 square meters in the capital of Bosnia and Herzegovina (BiH) is a staggering 219.700 BAM, while the average monthly salary in the country according to the latest data was 1.262 BAM. This raises a key question: how many years does it take for the average person in Sarajevo to earn enough money to buy an apartment?
If we take into account that all income goes towards savings for the purchase of an apartment and we do not take into account inflation, interest, and other factors, the calculation is clear. The annual salary of an average person in BiH is 15.144 BAM, which means that it will take you 14.5 years to buy an apartment.
This means that the average worker in Sarajevo would have to work for 14.5 years in order to save enough money for a 70-square-meter apartment and invest his entire income in that purchase. This calculation, of course, is not completely precise because it does not take into account real conditions such as inflation, interest rate, taxes, and other living expenses. Also, people usually have other expenses and obligations that reduce their ability to save.
This shows us how challenging it is to achieve home ownership in a city where real estate prices are significantly higher than average incomes. In addition to savings, many citizens are considering alternative approaches, such as home loans, to achieve their dream of owning their own home.
However, it is noticeable that more and more people are choosing to rent apartments as a solution that gives them flexibility and the opportunity to live in urban areas, N1 reports.
E.Dz.
