Do you get depressed when you hear stories about people buying properties in Prague or Budapest or Riga a decade ago for sums that sound like pocket change these days?  Do you look at the prices in most of the Eastern European cities and think that you’ve left it too late already?  That you missed the boat?

Well maybe not.  There is still a chance that you can see the same type of future growth that buyers in cities like Prague and Budapest have seen over the past decade.  However, as buyers in those cities were seen to be taking quite a major risk back in those days, so this is not an investment for the faint-hearted.
 

Yes, we are talking about Belgrade in Serbia.
 

isn’t going to be happening any time soon, although talks are taking place (some people are talking of EU entry around 2012-2015).  This should be helped by elections in January 2007 that returned a generally pro-Western coalition.

All in all, it’s not looking that bright at the moment for Serbia.  Want some more bad news?  Property prices were more or less stagnant in 2006.  Knight Frank don’t give any forecasts for 2007.  They’re probably too scared to send anyone there to find out!

So if you are looking for a nice safe get rich quick scheme, stop reading now.  Avoid Serbia like the plague.  However, if you are a speculator and are building up a decent sized portfolio across a number of different countries and are looking for longterm growth, Belgrade could be of interest.  Certainly commercial developers are starting to tall about opening modern shopping malls there, so they are obviously confident that things are going to get better soon.

Why do we think that Belgrade offers potential?  First of all, prices are still reasonably low there.  Admittedly not as low as in Sofia, but lower that just about anywhere else in Europe.  When (hopefully not ‘if’) Belgrade gets back to somewhere near its former glories, the prices have a lot of lost ground to make up.  Another positive factor is that mortgages are available in Serbia.  The interest rates are pretty high, but the 30 year duration is among the best available anywhere.

The high interest rates mean that not so many of the locals are able to afford mortgages.  As a result, most of them are going to have to rent property, which means that rental yields here are very good. As the Serbian economy starts to catch up, a lot of foreign multinationals are likely to enter the territory over the next few years and their foreign employees are going to need somewhere to live.  There is not so much new property development happening here at the moment, so this should mean that yields stay high for a long while to come.

Oh, and they won this year’s Eurovision Song Contest as well, which should raise the country’s profile a little.

In summary, Serbia is one of the riskiest territories that we cover on Propertastic! at the moment.  Only you can balance the risk versus the reward.  With prices not really increasing much at the moment, it’s probably worth waiting a while to see if the market starts moving rather than leaping in right now.  But it’s definitely a market that’s worth keeping an eye on.