2024-03-25 08:36:58
Tourism in Croatia, Montenegro, Greece and Albania leads foreign buyers, the price increase it is bigger there than in Bulgaria
Property prices in Bulgaria are growing and in the last 2-3 years our country is regularly in the top 10 in terms of price appreciation in Europe. But it turns out that this is not only a Bulgarian patent, but in the Balkans there has been a madness with housing prices.
There are at least four countries around us where they have gone up much more. And if we add Istanbul to them, it turns out that our neighbors should envy us for the relatively calm market.
In the Turkish metropolis, apartments are currently 12 times more expensive than 9 years ago. Price growth for 2023 alone is 76 percent. And in Bulgaria, we think that a 9.2% price increase in a year is too big.
At the same time, the neighbors have to cope with the purchase of a home without a mortgage loan. The prime rate in mid-2023 had reached 8.5%, but as of January it is already 45%. As a result
the average interest rate on housing loans in Turkey
is 40%, and in our country it is less than 3 percent
In addition, banks there grant mortgage loans for as little as a fifth of the home’s value. In 2023, for example, only 15% of new housing transactions were financed with a bank loan, the rest were done with cash.
In neighboring North Macedonia, the latest statistics show that properties are also rising in price at a high rate of 20.6%. The most likely reason for the current growth is that since 2020 the country has already been in formal negotiations to join the EU and is only now being noticed as a place to invest. The same applies to Albania, which is next in the ranking of price appreciation of the Balkan countries with an annual growth of 17.6%. (See the infographic ).
Apartments in the center of Skopje with two bedrooms and an area of 80-100 square meters can be bought for 80-100 thousand euros. Only the luxurious large houses in bar districts outside Skopje are more expensive, but even their price rarely exceeds 300 thousand euros.
Even building sites in Ohrid, suitable for hotels, although not on the first line of the lake, can be bought for relatively reasonable sums.
In Albania, trends are primarily driven by vacation properties and the opportunities available to purchase
home of the Adriatic
coast,
especially in Saranda. The local market mainly attracts foreigners from the Scandinavian countries, who buy holiday homes also because of the geographical location – Corfu, for example, is very close to Saranda, and from there it is easy and quick to reach popular destinations such as Croatia and Montenegro.
On Albanian real estate sites, you can often see offers for apartments with sea views in Saranda or Vlora
with prices of 100-150 thousand euros for 80-100 even
120 square meters
In addition, especially in Saranda, it is full of newly built open and closed residential complexes.
The reason for the increase in property prices in Bosnia and Herzegovina is quite different, where for the last year the growth was 17%. This country, which actually consists of three different parts – the Federation of Bosnia and Herzegovina, the Republika Srpska and the Brčko District, has only twenty kilometers of Adriatic Sea and is mostly mountainous.
A World Bank report two years ago found that the property market in this federal state was booming, primarily because of the mass acquisitions of homes and offices by foreigners from the Middle East and Turkey.
In 2023 in Istanbul, only 15% of new housing transactions were financed with a bank loan, the rest were done with cash.
At first they came as tourists, liked the climate, which has nothing to do with the Persian Gulf, and gradually settled down permanently, buying homes and offices. There are real estate ads mainly for Sarajevo and its surroundings, but for the majority of them the prices are not indicated.
Neighboring Montenegro is the complete opposite. It has a thriving tourism sector and strives to attract paying tourists. Vacation property deals have increased by 10 in each of the past years, but other properties are also in high demand.
After the capital Podgorica, the greatest interest is in Budva Riviera, Herceg Novi, Kotor, Tivat and in general the cities along the Adriatic coast. But despite the unique nature, the average value of residential properties in Montenegro is 1,500 euros per square meter.
The curious thing is that in the capital Podgorica, which has less than half a million inhabitants, prices are even lower. They are higher in resort towns, but comparatively
ads are rare,
exceeding EUR 1 million,
except for large luxury houses with swimming pools and even for properties that at first glance appear to be cultural monuments. But there is quite a lot of dynamics and the growth of real estate prices in Montenegro is similar to the Bulgarian one – 9% on an annual basis, after it was much higher in 2022 and 2023.
In Serbia, the real estate market and construction in general had stagnated for a decade because of the war. Things changed after the Berlin Process, in which the EU included Serbia and other Western Balkan countries in a series of infrastructure projects to strengthen economic development and stability across the region. Thus, since 2018, construction and housing prices have gone up, as has lending.
But Serbia is far more closely aligned with the ECB’s interest rate policy than Bulgaria. There, the central bank tightened the conditions for granting loans so much that the interest rate on housing, which until mid-2023 was around 6 percent, is now 8%.
According to the 2023 report of the Association of Banks in Serbia, the number of withdrawn loans fell sharply – from over 13 thousand in 2022, to 6,717 the following year. Their value is higher, but this is due to inflation.
The average price of residential property in Serbia was around 1,700 euros per square meter until the beginning of 2023.
Since then, a sharp increase has begun and is currently close to 2 thousand euros.
The remaining three real estate markets around us – in Greece, Romania and Croatia – are the most interesting.
Greek is the most familiar to Bulgarians, it became popular according to a classic scheme – first the locals go on vacation, they like it and start looking for a property to buy. For the last ten years, about 10 thousand Bulgarians have bought in Greece, but it is almost exclusively about the northern part of the country.
But this interest decreased in 2022 and especially in 2023, when the average property price appreciation reached 18%, and by the end of 2023 it was reported annually at 13.4%.
Statistics say that
average housing price in
Greece is 2500 per square meter
This is a market that is primarily driven by demand from foreigners and our southern neighbor has a tradition of attracting them. It is enough to list how many world famous people have real estate on the mainland or on the islands to see that the property market there, which during the years of the debt crisis had died down, is now feverish again.
The market in Romania is similar to the one in Bulgaria – there has been strong price growth in the last 2-3 years, which decreased to 6.49% at the beginning of this year. The average level is 1,510 euros per square meter, but as in our country there are quite large differences between individual regions and cities. In Bucharest, the average price reaches 1,700 euros, and in the second largest city – Cluj-Napoca, it even exceeds 2,500 euros, nearly 2,000 euros in Brasov.
But in the port city of Constanta, which we should compare with Varna and Burgas, the average price level is 1,581 euros. In Varna and Burgas, this is the level only in the best neighborhoods for living, otherwise the average price for the two cities is around 1,200 euros.