House prices in the Balkan country have already gone through the roof, with a registered 20-percent increase in the last quarter of 2022 alone. While figures show that an average of 5,000 homes are built every year, statistics reveal that around one-third of these properties are vacant. The situation is also similar in other countries of the region. V4NA has interviewed an expert, who says this is because most people see property as an investment.

„While Inflation eats up money, your apartment stays”

Property prices in the country were first pushed up by Covid, then the Russia-Ukraine war, and now by inflation. Nevertheless, a significant proportion of Macedonians consider buying an apartment to be one of the best investments.

Photo: V4NA

The family of Zlatko, from Skopje, also share this view. Although they live on the outskirts of the capital, they are planning to buy a flat near the centre. Buying an apartment is a good investment for many reasons, 40-year-old Zlatko says. In his opinion, the property will still be there for his children, and its value may not be lost, while his cash reserves could easily be eaten up by inflation.

„If you have some cash on hand, it might be worth considering to invest in a flat. Owning a property can bring in additional revenue for your household, as you can rent out the apartment and recoup your investment,”

Zlatko says.

The man from Macedonian stressed that they made a collective decision to purchase a property two years ago and signed the first real estate sales contract at 1,000 euros per square metre. However, the issues began when the construction’s planned start date was delayed, and they were informed that if they wanted to proceed with the purchase, they would have to pay 1,300 euros per square metre. Despite the higher price, Zlatko was worried that prices could increase even more and that finding an available apartment in that location would be difficult, so they decided to accept the new offer.

Photo: V4NA

Some say the housing situation in North Macedonia way too complex and difficult to follow, because prices are rising while the population is shrinking, and a third of homes are unoccupied. The latest census shows that there are 839,174 homes in the country, out of which 531,987 are occupied, while the remaining 307,187 are vacant, including 60,000 empty homes in Skopje. Meanwhile, the census also revealed that the number of homes has increased by 20.2 per cent nationwide over the past 20 years. This trend is set to continue, with 5,959 homes being built in North Macedonia in 2021 alone, the State Statistics Institute says.

Photo: V4NA

Apartments are resold after several years

The situation in Serbia is similar to its southern neighbour. There too, apartments are mushrooming, and although they are sold almost immediately, many are still vacant. The reason is that people see buying a home as an investment, a real estate agent said, responding to V4NA’s question. They buy the flats, and then after a few years, when the price goes even higher, they sell on their untouched, new-built flats. So they earn thousands of euros in a couple of years without touching the building. Asked why they don’t rent it out until they get rid of the property, the expert said they don’t want to deal with the expense and there is less risk if renters don’t deteriorate the property.

Price hikes in Macedonia seem unstoppable

Returning to North Macedonia, property prices saw a steep rise last year. Data published by the National Bank reveal that prices increased by more than 20 per cent in the last quarter of 2022. However, this was no novelty, just the continuation of the trend that has persisted for quite some time. The last quarter of 2021 already saw a double-digit rise in prices compared to an average increase of 2 to 6 per cent earlier. In the past decade, property prices stayed at their lowest in 2017, and have been continuously on the rise since then.

Photo: V4NA

It comes as little surprise that the prices have soared to such an extent, Nikola Velkovski, a senior official from the Chamber of Commerce, says, adding however, that the properties’ asking prices are far from being a true reflection of reality.

„In my opinion, it is no longer possible to push property prices further up. In fact, they should be reduced. I’m quite sure about this, because once a price is established and customers accept it, there will be no drop in price. Current prices are not driven by increases in the price of raw materials or labour. Of course, the quality of the workforce is also an issue, good workers must be paid well, but even with all this taken into account, the increase in the price of fully-completed apartments appears far too high,”

Nikola Velkovski emphasized.

Photo: Screenshot

Apartments for sale in central Skopje can cost as much as 2,200 euros per square metre, which people can no longer afford. As a result, the demand for apartments has declined and the expensive ones in the city centre are no longer sought after, real estate agent Lidija Smiljkova told Radio Free Europe.