Apartment Building in Republika Srpska Gaining Momentum Despite Inflation – Unclear When Price of Squares Will Drop

Although the recently published analysis of Deloitte consulting company indicated that Bosnia and Herzegovina is one of the top European countries with the lowest real estate prices, it seems that fact doesn`t matter much to the locals who are still debating on whether to start the process of apartment purchase. The onsite data aren`t encouraging either. Inflation, caused by the global geo-political situation has resulted in price increase of all materials necessary for the cosntruction of residential-office buildings. Consequently, the price of construction of a square meter of apartment building in B&H had previously been KM 1,200 (EUR 600) whereas now it`s KM 1,700 (EUR 850)

All of this caused much bigger price of a square meter, so now, he price of new apartments is between KM 3,500 and KM 4,500 or 4,600, Mile Petrovic, the Secretary of the Association of Construction and building materials industry at the Chamber of Commerce of Republika Srpska tells eKapija. However, according to Petrovic, the supply of the materials has stabilized.

– What is obvious is the fact that there`s a slight stabilization of the market, which is the main goal of buyers and investors alike. In order for the prices of residential and office space to drop, the parameters that participate in forming those prices need to decline – land plot, Building Land Development Fee and compensation, construction works etc. Different circumstances would not allow for the decrease in prices, states Petrovic.

Due to coronavirus epidemic and the Russia-Ukraine conflict, the price of building material has gone up each month in the previous period. Though, prices in certain areas have stabilized, there was even a decline in prices of structural steel in the last month and a half and now the supply is back to normal, says Petrovic.

– The market is the one that dictates whether the purchase of apartment pays off or not at the moment. But I think it does, mostly because of ever-increasing inflation. The diaspora wants to purchase properties in RS as well because they don`t want their money to lose value. That is good for us at the moment, but we need to make sure the price of square meter is affordable to our citizens. We have to take care that the price doesn`t differ a lot, but there`s little investors can do about it because they also have to pay for various elements whose price is dictated by the market, Petrovic explains.

Privredna komora RS

Republički zavod za statistiku RS Banja Luka

Chamber of Commerce of Republika Srpska

Association of Construction and building materials industry

Republika Srpska Institute of Statistics

Mile Petrovic

price of square meter in RS

price of new apartments in RS

new apartments in RS

apartment building in RS

price of square meter

price of apartments

purchase of real estate

real estate transactions

building of apartments

inflation

purchase of apartments in RS

price of constructinon materials

price of steel

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