ARE WE IN THE GOLDEN AGE OF REAL ESTATE?

There are numerous factors contributing to the increased interest in buying real estate and the rising prices of both housing and commercial space, from low interest rates and favourable mortgage deals, via large amounts of “ready cash” in circulation, all the way to changes on the world market. Despite expectations that prices and demand would stagnate over the course of this year, real estate experts are predicting that this will have to wait until at least mid-2023.

How Much Square Footage Can Be Bought For A Million Dollars?

Overlooking the fact that almost none of us ordinary little people will ever have a million dollars to buy real estate, analysis conducted by global real estate consultants Knight Frank shows how much square footage can be bought for that amount. Led by the notion “location is everything”, they set off from Monaco, where a million dollars will only buy you 15 square metres of living space. Only six square metres more, i.e., 21, can be bought for that amount in Hong Kong, which ranks it second, while the UK capital of London comes third because there you can buy a “whopping” 31 square metres for a million dollars. This amount can buy you 33 square metres in New York, 35 square metres in Singapore, 37 square metres in Geneva, 41 square metres in Sydney, and 42 square metres in Shanghai, Paris and Los Angeles. You can find a 56-square-metre apartment in Beijing for a million dollars, 64 sqm in Tokyo, 73 sqm in Berlin, 77 sqm in Miami, 84 sqm in Melbourne, 106 sqm in Madrid, 108 sqm in Mumbai, and as much as 137 sqm in Dubai, followed by Cape Town (220 sqm) and Sao Paulo (256 sqm). Considering that the average price of residential property in Belgrade stands at around 2,000 euros, or 2,190 dollars, per square metre, a million dollars could buy you a 456 sqm property in the Serbian capital. However, calculating on the basis of the price of the most expensive square metre in the city, which stands at around 10,000 euros, Belgrade ranks somewhere between Melbourne and Madrid. Source: knightfrank.com

Prices Won’t Start Falling Anytime Soon

The current situation doesn’t indicate that real estate prices in Serbia will fall in the near future, given - among other things - the growing number of Russian and Ukrainian citizens opting to rent and buy apartments in Serbia. But urban apartments aren’t the only properties exposed to rising prices, as summer houses, building plots and garages are also becoming more expensive... The pandemic has led to increased demand for summer houses and building plots on the outskirts of larger cities, primarily Belgrade, Novi Sad, Niš and Kragujevac, leading to prices per acre having multiplied several times. In terms of popularity, demand and price, Avala, Kosmaj and Fruška Gora stand out, as do settlements along the banks of the Danube and the Sava, with no indication of a return to the previous situation. Over the last few years, during which it has become all but impossible to find a parking space in Belgrade, the prices of garages in the city centre area have reached the value of a small apartment in a provincial town or a full rural homestead. Buying a garage as an investment has proven to be the best in the Belgrade municipalities of Vračar and New Belgrade, where ever more residential and commercial buildings are emerging. According to estate agents, a city centre apartment is a good investment today, but buying a garage in the city centre or in New Belgrade is an even better investment.

London, Capital Of Microflats

The ever-growing trend of people relocating en masse from small towns to major cities is creating a growing shortage of housing and demand for miniature apartments. Microflats are essentially mini studio apartments or tiny bedsit residences that have a miniature living room that doubles as a bedroom, a mini kitchen and a tiny bathroom. They are ideal for people living alone, usually students or single workers, though there are also variations encompassing 10 square metres that can accommodate two. They are generally equipped with fold-down beds that are stored vertically against a wall when not in use, as well as folding desks or tables. As many as 8,000 new microflats were built in the UK in 2016 alone, with the world’s largest microflat residential building, containing as many as 546 residences, located in London. This building also includes tiny apartments covering a surface area of nine to 12 square metres that utilise a shared kitchenette and bathroom. Each floor includes a larger kitchen with a dining table, which is used by between 30 and 70 tenants.

Dear, Dearer, Dearest

The most expensive residential square metre sold in Serbia last year was in the Belgrade Waterfront complex, in the Savski Venac municipality, and cost €10,068. The apartment encompasses 144 square metres, meaning that the buyer spent just over €1,449,000 for this property. The city’s most expensive garage space was also sold in the Belgrade Waterfront quarter and cost €40,000. According to the Republic Geodetic Authority, the highest price per square metre in an older building was achieved in Vračar, at a price of €4,615 per square metre for a 26m2 flat. The dearest city apartment sold in 2021 is located in New Belgrade, covers an area of 399 square metres and cost the new owner €1,888,614. Belgrade’s most expensive house sold in 2021 is located in the Savski Venac municipality and cost five million euros. Source: Euronews

Smart Offices Will Own The Future

The way we buy, work, socialise and communicate with friends, colleagues and business partners has been viewed differently since the Covid-19 pandemic hit the whole world two years ago. Firstly, thanks to quarantines and lockdowns, we discovered what it is like to work from home, then we learned how to keep our distance, and we ultimately grasped how we can live with the virus. For employers, the health of workers become a priority, but this isn’t only restricted to the period of the pandemic and is set to become the standard. Future business premises must be dynamic and flexible, with digital tools applied to the max, as they are set to play a key role in the offices of this new age. These smart offices will reduce the need for physical touch to a minimum, thus ensuring the maximum protection of employees’ health, while various sensors that register the presence of people in a space will be used to increase the flow of fresh air. The preferred business properties will be those located in close proximity to parks and other areas of greenery, but also commercial premises situated beside rivers or recreation and relaxation zones.

Mortgage Interest Rates On The Rise

Fixed interest rates on 30-year mortgages in the U.S. have reached 5% this year for the first time since 2011, and professionals from the banking and real estate sectors warn that interest rates could continue to rise.

“Most buyers base their price range on how much they can afford every month and mortgage payments go up for a given loan size as rates increase. As a result, the increase in mortgage rates means that homebuyers will have to adjust their expectations, and begin shopping in lower price ranges. We might see less competition for higher priced homes and more competition for lower-priced homes,” says Holden Lewis, a home and mortgage expert at U.S.-based personal finance company NerdWallet. Source: marketwatch.com