Soaring real estate prices in the Balkans raise suspicion

Rising construction costs

The region’s real estate and construction experts say that, among other factors, rising costs of building new apartments are pushing up prices.

“The prices of building materials are higher and it is also more difficult to find construction workers from neighboring countries due to the sanitary measures linked to COVID-19,” Podgorica real estate agent Mirko Radunovic said. “But despite the prices, the demand is greater than the supply.”

Selim Hasani, head of the Association of Construction Companies, which is part of the Economic Chamber of North-West Macedonia, said that “the rise in prices of building materials and energy ranges from 20 to 100% , and we are also seeing an increase in the wages of the workforce. “

Some capitals also face their own specific problems; in Skopje, for example, the slow adoption of detailed town plans led to a decrease in the number of building permits issued in 2021, Hasani said. “All of this translates into less new construction and increases the price of existing construction, as demand remains high. “

A North Macedonian real estate agent, who spoke on condition of anonymity, said the prices were deliberately inflated.

“We often see brand-new buildings sold ‘fictitious’ in just one month. So who buys these apartments so quickly, you might ask, because common people don’t have vast funds? Said the agent.

“The truth is, only part of the building is marketed for regular sale. The rest is kept as an investment. The companies and individuals who own them are in no rush to sell, ”keeping supply low and prices high.

In Zagreb, the real estate market is hit by the aftermath of earthquakes in the capital and central Petrinja in March and December 2020 which have driven up demand for building materials and workers.

“The earthquake is one of the main generators of the rise in apartment prices in Zagreb,” said Borislav Vujovic, director of Opereta, one of Croatia’s largest real estate agencies.

High inflation is also a problem, Vujovic told BIRN, as people invest their savings in real estate to avoid losses and thus keep demand high.

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