Construction sector growing; real estate market could drive GDP

During the state of emergency, real estate transactions were reduced by 70%. At the same time, the construction sector is growing and experts estimate that the crisis caused by the pandemic will not significantly affect both the real market and construction sector.

30% more apartments have been purchased and half of the real estate has been paid for with a loan compared to last year.

“We have an online service that is available 24/7 and via which we received over 24,000 applications, of which 5,343 were related to real estate sales. It should be noted that there was a significant decline from the end of March to the end of April, but in late April, the real estate market started to recover slightly and this recovery continues,” underlined Maja Radović of the State Geodetic Authority.

The total amount of retail mortgages granted to citizens in March was 4.3% higher than in the same month last year.

“It is very important that banks have continued to lend money to both real estate developers and buyers because the growth of construction in the previous three years was a record high, and thanks to this we have had strong GDP growth. Therefore, it is the best interest of the state to guarantee that project financing that banks approve will be refunded to them in the next 12 or 24 months,” explains Nebojsa Nesovanovic from the CBRE Company.

Despite the state of emergency, construction activity was quite vigorous and a lot of facilities have been built, so in March, the output volume in the building industry was 21% higher than last year.

“When construction works, the whole economy works, that is, not just construction sites, but everything that revolves around them. I think that, in the next period, the construction industry will be one of the main drivers of increased production and at the same time, contribute to the growth of gross national income,” said Goran Rodic of the Serbian Construction Chamber.

Experts predict that the European economy will experience a 4 to 6% economic decline this year, but also that next year’s growth will be slightly above that level, so the European economy is expected to recover very quickly. The situation in Serbia this year and next year will be significantly affected by events in the construction sector.

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