Position, demand, higher wages: Why apartment prices "go wild" in the Balkans' sunniest town?
The figures are too high for local customers, but not for those from the surroundings
In the extreme south of the Serb Republic (RS), i.e. on the border between Bosnia and Herzegovina (BiH), Croatia and Montenegro, lies a town that has been attracting tourists for decades - because of its beauty, food, and rich culture.
You guessed it, it's Trebinje. Only 27 kilometers separates it from Dubrovnik, a Croatian town visited mostly by wealthy tourists and which over time has built a special reputation, taking into account all other coastal locations.
The proximity of Dubrovnik certainly affects the reputation of Trebinje itself, although that city has its own qualities - enough to be visited and moved to. Namely, construction of a dozen residential buildings has been announced for 2021, with at least 50 apartments in each. Demand is growing and prices are rising.
However, they still can't match those in pricey Dubrovnik, and the two towns are close enough for some, perhaps even foreign visitors, to want to buy an apartment or a house in Trebinje. On the other hand, many like the Mediterranean climate; with 260 sunny days a year, Trebinje is one of the sunniest towns in the Balkans.
Compared to the crisis of 2020, when, admittedly, new construction and real estate transaction also flourished, 2021 is exceeding expectations, with the price of residential square meter rising by 10 to 20 percent.
In other words, a square meter in a new building in Trebinje is close to the figure of 3,000 convertible marks (KM - currency in the BiH), or 1,500 euros. Locals say that this amount is too high for them, but for foreigners, and even buyers from Serbia and other parts of BiH - the current prices do not sound so steep.
What affects the price?
The upper limit for the price per square meter in a new building is 2,800 KM or about 1,400 euros, but there are exceptions - for example, the price in a building under construction is usually slightly lower than in an already finished building, but in Trebinje the situation is different. It's possible for the price per square meter to be a little higher in a building that is yet to be built.
That speaks enough to the increased demand, but also about the plans related to residential buildings and complexes, which obviously give buyers confidence that they will get their "piece" of the sunny Trebinje, and that comes with a price tag. Specifically in Trebinje, construction of about 400 apartments is in progress or is nearing completion, with apartments often purchased in advance.
There are several reasons that affect the growth of prices per square meter in this city in Herzegovina, beside the demand. There is also the position of Trebinje, construction materials that are becoming more expensive all over the world, initial payments and higher wages. On the other hand, the city's reputation will certainly be affected by the airport that is to be built.
Investors say it is too early to assess how much all of the above will affect the growth of prices in the future, but the point is that the structure of the population itself has changed over time. Prices are too high for local buyers, but not for those from the surrounding area and from abroad - and that is the essence of the progress made by the Trebinje real estate market.
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