Will real estate prices increase in BiH? – Sarajevo Time

The construction sector has not escaped the upward trend in prices either. Energy and materials became more expensive all over the world, which ultimately led to higher prices for services and real estate. There is no end in sight to this trend, writes Federalna.

Movement restrictions and price hikes caused by the coronavirus pandemic, the so-called trade war between China and the United States, and then the additional difficulties due to the war in Ukraine. Consequences of the increase in the price of electricity, oil and gas, which led to the increase in the price of all services, including in the construction sector.

“In February last year, we had two price increases, and after that prices started going up every 15 to 20 days,” explains Mile Petrovic, secretary of the Association of the industry of the construction and building materials at the RS Chamber of Commerce.

“There were different moves by product groups. Building iron felt the strongest consequences. Prices have increased by up to 80% in the last year,” said Enisa Kadic, secretary of the Construction and Building Materials Industry Association at the FBiH Chamber of Commerce.

“The price increase is still ongoing, so the exact price of the increase cannot be determined, but we can say with certainty around 25%,” says construction company director Danijel Ruzic.

Thus, the prices of iron, wood, insulation and other building materials have increased, are increasing and will continue to increase, and as the purchase of materials is more expensive, so are services and real estate.

“If price growth continues with this expansion, investors will certainly not be able to build at these prices. We cannot expect that, if there are additional price increases, and it has been announced that there will be, apartments can be built at these prices,” points out Petrovic.

The situation is the same in other countries, except that there are examples of those finding long-term solutions, which could reduce at least some aspects of the increase.

“For example, Turkey, which has prepared its capacities and plans to take long-term strategic measures, to increase its production and that this production can be brought to the European market. It will appear as another supplier, alongside those in the Far East, which will bring the price down considerably, if nothing else, due to the transport markets,” says Kadic.

Some materials are also produced in Bosnia and Herzegovina, but resources are purchased from other countries, which again causes problems.

“And for what is produced, the raw materials are purchased all over the world. This is where the problems of transport and global supply of building materials and all materials in general arise. Everyone announces price increases, the duration of which is difficult to determine,” Ružić points out.

The prices of everything – from energy to materials – keep rising, and the end of expansion is not in sight. The problem, mentioned by the interlocutors, is the lack of qualified labour. They said however that our construction sector is strong and vital, but that it is necessary to invest, to maintain it and to create long-term plans, which could ensure stability.

About Eleanor Blackburn

Check Also

Brian Golden launches the real estate practice at Keegan Werlin LLP

Brian Golden Boston – Keegan Werlin LLP announced that Brian Golden, former director of the …