The real estate market is on the rise in Bosnia and Herzegovina: Will the "boom" continue?

“Until when will price rise? Will this stop? Are there any price drops? I don't know who buys apartments at these prices... “

These are just some questions and comments that most professional real estate brokers in Bosnia and Herzegovina are dealing with lately. 

We could say that these questions are justified because, according to the research of our colleague Darko Đikanović from Adriatic Appraisals, the residential real estate market in Bosnia and Herzegovina in the last quarter of 2022, compared to the same period in 2021 had a price increase of 31% which is the highest increase in Europe. 

In this article, we will take a look at the reasons behind this rise and potential factors that could affect the future trajectory of the market.

Firstly, a few years ago, the price of the real estate in Bosnia and Herzegovina was far below the average in neighboring countries, but with the COVID and pausing of the construction of some larger new construction projects (which, according to some announcements, have yet to start with intensive construction in Q3 or Q4 of this year) resulted is that the offer of real estate, especially apartments od the market was far less than the total demand. This scarcity of available real estate naturally fueled demand, leading to significant price increases. 

Also, interest rates for home loans were very approachable, which attracted a lot of buyers. Investing in real estate is still the safest investment in Bosnia and Herzegovina, given the still low level of risk and the stable return achieved, which further boosted demand. 

If we look further at the past, the real estate price have been constantly rising since 2013, so according to the internal data of the Agency PROSTOR http://www.prostor.ba , in the period of 2013 till 2020, it shows a constant stable increase from year to year. 

The combination of sustained growth and recent strong price increases which have happened over the last two years, has created an environment where real estate has become part and parcel of speculative investment, both for domestic and international buyers. 

However, the market flows in the EU caused by the geopolitical situation, together with the high inflation, rising interest rates and increased living costs point to a slowdown in price growth in the real estate market this year. 

Predicting the future of any market is challenging, and the real estate market is not an exception. 

Therefore, it is time for both buyers and sellers, as well as industry professionals, investors and policymakers to remain alert, adaptable and well-informed as they navigate this period of significant growth and potential change. 

Darko Đikanović., (2023), (Linkedin- Price increase), avilable at: https://rb.gy/3kkam

"Centralna banka"., (2023), (Spring round for macroeconomics projects for 2023 - 2024), available at: https://www.cbbh.ba/press/ShowNews/1514 (31.5.2023.)

Haris Dervišbegović

Head of the segment of new construction and real estate appraisals

Licensed Real estate agent  

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