Serbia, a country of 7.1 million inhabitants, has an average growth rate of approximately 3.8% per year, and is rapidly growing. The country is still undergoing a development process, quickly closing the gap between itself and its neighboring European Union member states such as Hungary, Romania, Bulgaria and Croatia. At a time when real estate prices in Israel in particular and in Europe in general have sky-rocketed, the Serbian real estate market offers an array of affordable and attractive investment opportunities such as private homes, apartments, lots with approved building permits for immediate construction and commercial real estate. The combination of stable returns and increases of real estate prices against the backdrop of the anticipated entry into the European Union has made Serbia into the next “jewel” in the real estate crown of Europe.
Serbia – the new real estate star
Real estate prices in the last five years have been steadily increasing at 7% per annum, and approximately 60% over the last ten years. The return on rentals ranges between 6%-8%. The combination of the two as a result of the country’s accelerated development together with positive immigration yields a significant increase in demand in the real estate market.
High Profitability Rates
The interest of the Israeli investor in Serbia is directly related to the improving economic situation and political stability. Serbia is a highly developed and advanced country and the combination of the support of the European Union and an eastern European country with strong western characteristics creates attractive opportunities for profitable investments. High growth rates in the real estate market were maintained in Serbia in recent years.
The establishment of manufacturing plants in Serbia attracts a high quality work force in large numbers which increases the demand for high quality real estate. As a result of the change, in recent years there has been an increase in foreign investment in Serbia by parties identifying the great potential in the emerging market. Apart from Israeli companies, investments in real estate in Serbia are also made by US funds as well as by entities from the UAE and African countries. For instance, in 2013, a company from Abu Dhabi purchased the Serbian national airline “Air Serbia”. Among the foreign investors which decided to establish operations in Serbia, include some of the largest and most prominent global conglomerates which have decided to establish huge plants and factories in the northern part of the country close to the Hungarian border, these include, among others, Siemens International, Swarovski, Continental, Fiat and Heineken.
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