Serbia’s residential property market continued to record price growth in the second quarter of 2026, despite weaker transaction activity and increasing pressure on housing affordability. The national residential property price index increased by approximately 5.25% year on year, with existing apartments recording stronger appreciation than newly built units. Prices for existing apartments rose by approximately 6%, compared with an increase of less than 4% for newly constructed apartments.
Existing apartments record stronger price growth
The difference between the two segments marks a change in the relative performance of Serbia’s residential market. New developments have generally commanded a premium, but faster appreciation among existing apartments indicates stronger demand for properties outside the newest projects.
Location remains an important factor in purchasing decisions. Established neighbourhoods already have access to infrastructure, schools, transport, retail and other services, while newer residential areas can require years to develop comparable amenities. Older apartments can also carry a lower absolute purchase price, although buyers may need to allocate additional funds for renovation.
Rising prices affect first-time buyers
The combination of continued price growth and strong mortgage availability has not eliminated affordability pressures. Annual apartment-price increases of 5–6% accumulate on top of several years of previous appreciation. Even where wages are increasing, housing affordability can deteriorate when current prices are substantially higher than their earlier starting point. This creates particular pressure for first-time buyers, whose purchasing capacity depends heavily on the relationship between income, mortgage financing and apartment prices.
Smaller units become more prominent
Developers are responding to affordability constraints partly by reducing average apartment sizes. The Serbian residential market is increasingly characterised by compact apartments in multi-unit buildings, allowing purchasers to stay closer to financing limits even when prices per square metre continue to increase. This changes the way housing affordability is reflected in the market. Rather than apartment prices declining, households can adjust by purchasing fewer square metres.
As a result, Serbia can continue recording positive residential price growth while the amount of living space affordable to a typical buyer becomes increasingly constrained.
