Source: eKapija | Monday, 18.10.2021.| 14:45
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Work from Home Moving People to Periphery of Big Cities? – Is the Time Right to Invest in Real Estate and What Could Stop the Investment Cycle?

Illustration (Photo: Tierra Mallorca/unsplash)
Despite the pandemic, the real estate market in Serbia has continued growing steadily, which started back in 2016. After the state of emergency was lifted, the market recovered fast, especially in the final quarter of 2020, when the Republic Geodetic Authority reported a record number of real estate transactions. All forms of real estate were bought and sold, from luxury apartments in elite neighborhoods in the capital of Serbia, to agricultural land in all parts of Serbia.

Especially pronounced was the demand for vacation houses in areas around big cities or apartments in tourist destinations in Serbia, such as Kopaonik, Zlatibor, Divcibare etc. This trend of “escaping” to real estate outside urban areas was also characteristic of many other countries in the world, so it fits into the global trends, Zoran Mitic, the director of the finance consulting company SEECAP Konsalting, says for eKapija.

– Companies and their employees have discovered that they can work from home without much problem, thanks to modern telecommunications connections. We believe that this trend will continue in the future as well, because an increasing number of people will use the possibility of working from home or the combined-hybrid way of working from home with occasional visits to the office – our interviewee emphasizes.

According to him, this will reduce the demand for business (office) space, or the office space will adapt to new trends.

This trend opens additional possibilities for investors in residential space, because an increasing number of purchasers will choose to live in peaceful and green peripheries outside the noisy, polluted city centers, especially if they do jobs that don’t require going to work every day.

– This opens possibilities for hotels and resorts in tourist centers to attract visitors-digital workers outside the main tourist season, provided that the hotel has the necessary conditions for combining work and rest – primarily a fast internet connection, special rooms for meetings during the day and so on. These are relatively small investments which can bring big benefits to hotel owners in the season and outside it – Mitic says.

The demand for residential real estate is also expected to continue.

– A home office is becoming a necessary part of the residential space, which is always accompanied by a fast internet connection, preferably of the optical kind, in each room in the apartment as part of the sale package of the residential real estate. We have noticed the trend of families, due to an increase in the number of the members of the household, selling their apartments in central parts of Belgrade and buying larger and more modern apartments in places such as Pancevo or Obrenovac. Some investors have already recognized that trend – our interviewee believes and adds that it is also an opportunity for local self-governments in Serbia’s countryside to attract qualified workers to live in their territories, which they would have to cooperate on with investors in residential real estate.

The purchase of houses on city peripheries is part of that trend. Fast internet, good infrastructure, including the possibility of connecting to the gas network, offer new living comforts in areas around big cities.

Illustration (Photo: Gaida)

Is the time right to invest in real estate?

In developed markets, real estate is treated as “alternative investments”, our interviewee believes. Still, due to the lack of a quality offer of shares, bonds and similar investment options, real estate has been the primary way of preserving the value of personal wealth in Serbia for over 50 years now.

– Professional, that is, institutional investors, are continuously following the market trends, estimating their opportunities for investments in real estate. They will draw their conclusions. As for individual investors, investments in profitable residential real estate will remain one of the main ways of preserving the value of their savings. They could include the purchase of condo residential units in their portfolio. With an adequate dose of caution when making a purchase, good planning and being aware of their financial possibilities, of course – Mitic believes.

What could stop the investment cycle?

What could slow down the investment trends are the interest rates, which are very likely to gradually grow as a consequence of the inflation trends, our interviewee says.

– Another possible cause could be the political instability in certain parts of the world (The South China Sea, Central Asia, for example), which could make investors nervous on a global level, and also in Serbia – he points out.

Presentation of projects worth EUR 100 million at Dubai Expo

The finance consulting company SEECAP will take part in Dubai Expo 2020 as part of the Business Delegation of Serbia and stay in Dubai throughout November. A total of 192 exhibitors from a large number of countries applied for this business event.

– During November, we will operate from Dubai, for which we are now carrying out the necessary preparations. The aim is to present the projects we are working on to investors during our stay there. These are projects in the fields of real estate and hospitality with an investment potential of over EUR 100 million – our interviewee says.

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