Real estate is a great investment option. And right now, buying a property in Belgrade is even more than just a simple purchase! For a price that is still relatively low and affordable, and through the simple procedure, you can buy a flat in one of the most attractive European cities. Even though the prices are lower in comparison to other European cities, they are quite high for our local market. The prices increased in the recent period and we are all expecting the drop, however, we can’t be certain when is that going to happen.
Then, you can use it to generate a passive income through renting it out for the long-term or even better – for the short term. Belgrade is a city that is expanding, and the renting market can be quite profitable for you! The demand for short-term rentals is growing even faster, so use this opportunity to make a smart investment.
Buying a property in Belgrade – chose your flat
What is your citizenship?
Before you even start looking for your dream flat, make sure your citizenship gives you the right to own real estate in Serbia. This is not always simple to ascertain, as various bilateral agreements define those rights. The way of acquisition, the type of property, and many other factors also play the role in this process. Generally speaking, citizens of most (but not all!) European countries are eligible for buying a property in Belgrade and Serbia in general. Also, this right applies to citizens of China, Israel, Turkey, USA, UAE, Canada, Brazil, Kazakhstan, and many other countries as well. Further, if you want to buy the flat as a legal entity, some additional rules and laws apply.
When you are looking for a flat, define what is important to you. Location, orientation, layout, and amenities such as a balcony, garage, parking space, or vicinity of certain institutions (such as schools) are very significant factors when choosing the flat. Belgrade is very cold during the winter, so you need to consider the heating and its prices. Also, think about the purpose of your flat. Do you plan to live there? Or you would rather rent it? For a long-term or a short-term? Or you plan to convert it to an office or business space?
The biggest dilemma of local buyers is – the old building or the new building? Both have their advantages, and you have to decide which style fits your needs the most.
The old building
The old building (in Serbian: stara gradnja) refers to most of the flats in the center and historical areas. Some of them were built in the mid-20th century (before World War 2). You will most likely not be the first resident in such a flat and there will be some “wear and tear”. So even though the prices of such flats are lower, you might have to invest additional funds to fix certain flaws. Adaptations of layouts of such flats are not always possible. On the other side, they are in very attractive locations and it is easy to rent them out or even use them as the office. They have thick walls and allow for privacy.
The most famous type of old flats is called salonac. Literally translated as the “saloon flat”, this type of flat has very thick walls and high ceilings (up to 4 meters in some cases). They were built according to the highest standards of the time. Most of them originate from the pre-war period, so it tells you enough about their architectural quality! As the name says, the big living room (saloon) dominates the space. People also call them “flats with a soul” and once, only the upper class and social elite used to live in such flats. Hence, they are well-maintained. Sometimes, bills for those flats can be high, especially in the winter, as it takes more energy to keep them warm.
The new building
The new building (in Serbian: nova gradnja) has flats which you can even buy directly from investors. They are built according to modern standards and according to the needs of a modern man. Further, they are energy-efficient (some of them come with an “energy passport”), and of course, the “wear-and-tear” of such flats and their installations are small. Some investors also offer a complimentary warranty on installations. Most of those flats come together with a parking spot (in the garage or outdoors). However, the residents of some “new flats” complain about thinner walls, and hence, inferior sound isolation. Even though the adaptation is also not always possible, future residents can negotiate with investors about the layout of future flat.
With or without agency?
Like anywhere else, there is a certain legal procedure involved in the purchase of the flat (or any other real estate). It is important to know that you do not have the obligation to use the agent or an agency for purchase – you can go through the entire procedure on your own. However, we strongly recommend you to find a trusted and reputable real estate agent or agency. They will make sure all the documentation is correct even before listing the flat or accepting to work with the seller. Not to mention that they will do their best to find a flat that meets your expectations. Then, in every stage of the process, they will be taking care of all the “legalities” and navigate you through the Serbian institutions.
The agency fee (provision) is usually 3% of the amount you will pay for the flat (minimums apply). All the fees must be defined by the contract. The agency can also charge for additional services, such as legal representation or translation. In case you change the mind and do not want to purchase the flat, the agency has the right to charge for the work they performed for you until that moment.
There are different fees associated with the flat purchase, and they depend on many factors. They include the fees for notary, bank, cadaster, etc. Some of them are the responsibility of the buyer and some are the responsibility of the seller. That is another reason why we recommend using the agency, as they will know exactly what are your financial obligations.
When buying a property in Belgrade, you have to know that different factors determine the price – location, the building style and age, and amenities. The prices are usually displayed in euros. The average price of a square meter varies between 1,500 € and 2,500 €. In suburbs, it is even possible to buy a flat for only 1,000 €-1,200 € per square meter.
In posh places such as Belgrade Waterfront, prices start from 2,800 € (generally up to 4,000 €). Belville is a bit more modest – the average price is around 2,500 € for a square meter. Skyline Belgrade is still under construction, but you can already buy a flat for 3,500 € per sqm. The abovementioned “saloon flats” are usually in areas of Vračar and Dorćol and the average price of sqm is around 2,500 €.
Buying a property in Belgrade – financing
There are 2 ways to finance your purchase: via the bank (mortgage) or pay the full amount at once. In order to finance it through the bank, you usually need to be a citizen and/or resident of Serbia, with regular income (employed or retired) and a certain credit score (also depends on the value of the real estate). As you probably do not meet these conditions, you will most likely have to pay the full amount at the moment of closure of purchase.
The bank will, of course, have to be involved in the process of purchase. Your agent will tell you what your options are, and help you navigate through the banking system. Again, you will have to make sure you have the entire amount available and ready. It includes not just the price of the flat, but all the fees as well, so make sure you account for that. The transactions in Serbia generally have to take place in Serbian dinars, even though there are some exceptions (in that case, bring euros). Your agent will help you with that as well.
Protect yourself while buying a property in Belgrade
If you are using the services of an agent, we still want to remind you of a few important points. When choosing your perfect flat, make sure the following requirements are met:
- Your citizenship gives you the right to own real estate in Serbia
- Agency is reputable, registered, and licensed. Your personal agent also must be licensed
- The property is registered, or as to say, “in the books” (In Serbian: uknjižen). It means that absolutely all papers are correct and that ownership is correctly determined and registered in the cadaster
- The seller has 100% ownership over the flat he is selling. If not, he has the permission of other co-owners. Ask for the evidence, and do not take his word for it!
- The flat is fully finished. You can buy the flat (usually for a discounted price) which is still in the process of building. However, we do not recommend this option
- You, as the new owner, have your property registered in cadaster under your name
As always, your More Than Belgrade team is here for you! We are not the real estate experts, but we can certainly connect you with the ones who are! Just let us know about it and we will connect you with some of the best agencies in Serbia!