The run up to the global financial crisis in 2008 saw Macedonian real estate booming, with property in the capital of Skopje enjoying 22% price increases after inflation. Prices dropped by 6.40% through 2009 before pickup up again 2010, and current numbers suggest the upward trend will continue with the help of a strengthening economy. The National Bank of the Republic of Macedonia is also doing its part by keeping interest rates at a low 4% to encourage yet further economic growth. For more on this continue reading the following article from Global Property Guide.
Macedonia has been recovering from the crisis. New dwellings in Skopje, Macedonia’s capital, saw 16.6% price rises during the year to H2 2010 (12.3% after inflation), according to the State Statistical Office, after an 7.83% drop in prices of new dwellings during the year to H2 2009 (a fall of 6.40% after inflation).
The year before the crisis, 2008, was a boom year, with a 27% house price rises in Skopje (22% after inflation), as foreign interest surged and the country gained confidence.
In H2 2010:
- Dwellings in Skopje were priced at an average of MKD 65,169 (€1,064) per square metre.
- Other parts of Macedonia had average prices of MKD 45,174 (€737) per square metre, 11.46% higher than in H2 2009 (a rise of 7.4%after inflation).
The National Bank of the Republic of Macedonia plans to retain its low key interest rate of 4% as favorable economic condition are expected to continue in H2 2011. To some extent, this may positively affect housing sales, despite Macedonia’s underdeveloped housing finance market.
Despite rapid growth in household lending since 2003, outstanding housing loans were still only 1% of GDP in 2007. In 2010, loans for house purchases were 18% of total loans granted to households.
After winning the Parliamentary elections in June 2011, Prime Minister Gruevski’s VMRO-DPMNE party aims to accelerate Macedonia’s campaign to join NATO and the European Union. However, these plans may take a while, because of Macedonia’s unresolved with Greece since 2008 over the use of the name ‘Macedonia’ by a Greek province.
Foreigners from countries which grant reciprocal rights can buy residential property in Macedonia, subject to approval from the Ministry of Justice, but landed property is somewhat more complicated.
This article was republished with permission from Global Property Guide.