Experiences of an American woman who was married to a Serb.

Monday, August 20, 2007

Serbian Real Estate Market Taking Off

Nearly everyone I meet is talking about real estate. Feels like California in the 1980s. There's this strong feeling the market is significantly underpriced, and will be going up fairly quickly - as in 10-20% steadily per year for the next five years at least. Seems to hold true no matter what real estate Serbs are talking about - farm land, houses, flats, Sombor, Novia Sad or even the biggie, Belgrade.

Here's some ways it differs from the US markets:

o Pricing by the square meter. People tell you how much by square meter, and then when you ask, they tel you how many meters, and then you have to do the math. Everything is evaluated by square meter price though. (Except farm land which is in hectares)

o Euros. Everything in the stores is Dinars only... but if you want to buy Serbian real estate, bring Euros. (BTW: If you need to exchange large sums of dollars for Euros for real estate deals in Europe, I strongly recommend this peer-to-peer el cheapo currency exchange which several friends have used FXA World.)

o Building & rebuilding is pretty cheap. Unlike the US where there's still a shortage of skilled building labor in many markets, Serbia has loads of talented workmen eager to take on renovation and building work. In fact, a Church painting restorer just finished painting the entire inside of our house in Sombor. He was quick, very pleasant, always on time, did a great job, and affordable. I've never had that experience with home repair in the US.

o Very few real estate agents... and they only rep a tiny percent of the actual homes or land for sale. Most homes and land are sold direct by owner. But hardly anyone puts the local equivilant of a for sale sign up. Very occasionally they might post a tiny black and white flyer in the window. You hear about everything through word of mouth. Incredibly we've seen far more flyers posted in public by flat (condo) seekers than we have from sellers. If you realy want to get into a particular building, you post a flyer outside it asking for people to contact you!

o Title and ownership -- fuzzy titles due to WWII, communism, etc are supposedly all being sorted out over the next year or two. This seems to be a bigger problem in Croatia than it is in Serbia because so many Serbs fled Croatia due to civil war, and their homes, often half burned-out, are still standing empty. It seems, to my perhaps misinformed eye anyway, few Croats fled Serbia. So there's not such a problem in the reverse.

Anyway, the giant mansion at the end of our street is a case just like much of belgrade... a beautiful building that's falling apart partly because the title hasn't been cleared up completely yet. It belonged to a rich foreigner (Austrian I think) before WWII, then invading troops used it, then the Yugoslav government took it 'for the people', and now someone in an office somewhere is sorting out what to do with the title. Meanwhile it stands empty.

Some of the best deals for formerly-government properties being privatized are being advertised in The Economist. I saw a ad there last week for a chain of 20+ department stores across Serbia for 150 million Euros... having been in some of the store in question, they themselves are totally not worth it. Horribly run down and half-deserted. However, the land they sit on is the real value. Gold, gold, gold.

Must go off to my language lesson now. Eyeing potential investment property all the way!

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