Real estate investing has always been popular among investors because of its stability and potential for long-term returns. However, the year 2024 brings certain challenges and opportunities in the real estate market.
This text deals with the analysis of the current state of the market, assessing whether now is the right time to invest in real estate or perhaps it would be better to wait for more favorable conditions. Our analysis is based on the latest data and real estate market research.
Real estate price fluctuations in 2023 in Serbia
Real estate prices in Serbia, especially in Belgrade, followed world trends with certain fluctuations during 2023. After a significant increase in prices in previous years, it is predicted falling prices in 2024. This presents different opportunities and challenges for landlords and investors.
When it comes to cities in Serbia, real estate prices in Belgrade showed significant fluctuations on a monthly basis during 2023. For example, the price of a square meter in the most sought-after Belgrade municipalities such as Vračar and Stari Grad reached record values of over 3,000 euros per square meter. Meanwhile, in the less popular parts of the city, prices were somewhat more stable, but still saw growth. In Novi Sad, the price of a square meter in the city center exceeded 2,000 euros, while peripheral locations recorded a more modest increase.
In addition to cities, popular places for investment are also tourist destinations throughout Serbia. Investors choose to invest in real estate on the mountain, Kopaonik and Zlatibor, and in the spa because of the great tourist potential and demand for rental properties in those locations. When it comes to apartments Vrnjačka Banja stands out due to the large number of visitors and developed tourism throughout the year.
What is expected in 2024?
Economists and analysts predict fall in real estate prices in 2024. Although the drop in prices is not the best news for current landlords, it represents a great opportunity for new investors or those looking to expand their portfolio. Current market conditions for buyers are as favorable as they were in 2018.
In 2024, the drop in real estate prices provides investors with a unique opportunity to enter the market or expand their existing portfolio. But that is not all. According to many experts, the coming years will be crucial for the real estate market, with predictions that real estate prices will rise by a significant 17.9% by 2028. This does the current moment is extremely favorable for investing.
The impact of interest rates on real estate investments
After 14 consecutive increases interest ratesleading central banks decided to keep interest rates at 5.25% during September, November and December 2023. This decision marked a turning point in the financial and real estate markets, as lenders began to lower their interest rates, resulting in an influx of mortgage products with interest rates below 5%.
Decision of central banks to keep interest rates stable it was a signal to lenders to adjust their lending policies. Starting in the last quarter of 2023, many lenders have reduced mortgage interest rates, allowing products with rates below 5% to emerge. This trend is a direct result of stabilization economic factors such as inflation and market liquidity.
Analysts suggest that this trend will continue, and that it will in 2024, mortgage products with interest rates below 4% will be available. This reduction will further stimulate demand for real estate, as potential buyers will have access to more favorable credit terms.
The combination of competitive mortgage rates and falling real estate prices creates favorable conditions for investment. Falling interest rates allow investors to borrow at lower costs, which increases their purchasing power. Lower interest rates reduce monthly loan payments, allowing investors to finance more or more valuable properties.
Increased demand for rental properties in 2024
An independent survey conducted by the National Association of Residential Landlords found that 71% of landlords reported increased demand for rental properties. This percentage is three times higher than in the previous three years, which indicates a significant increase in interest in renting and lays the foundations for further growth of this tendency. This increased interest in renting is an additional reason to invest in real estate in 2024, because it brings certainty to investors in the realization of passive income.
Due to economic uncertainty and increased interest rates, many potential buyers decide to rent instead of buying real estate. Rental provides flexibility without long-term financial obligations that come with mortgage loans.
The increase in internal and international migration contributes to the increase in the number of people looking for apartments for rent, especially in larger cities and economically developed regions.
High rental demand allows landlords to quickly fill their properties, reducing periods without income. Stable monthly rent income provides investors with security and predictability in financial planning.
Investing in real estate in 2024 represents a challenge, but also a potential opportunity for investors. High interest rates, inflation and regional variations in the market are factors that require careful analysis before making a decision.
Source: www.economy.rs
