Smaller Serbian cities emerge as hotspots for property investment

While Southeastern Serbia accounts for less than 10% of total real estate turnover and about 15% of construction activity nationwide, the region has seen rapid growth in recent years, revealing both potential and challenges.

According to Serbia’s Real Estate Cadastre (RGZ), all regions recorded annual increases in apartment sales and total market value in the first quarter of 2025. The South and East Serbia region posted the highest rise: a 41.4% jump in apartment sales and an 87.8% surge in transaction value compared to the same period last year. Average apartment prices in the region rose by 6.14% year-on-year.

Bor, with almost no new-build supply, recorded the steepest price increase in Serbia in 2024, 38% for apartments in older buildings. Zajecar followed with a 28% rise. In Zajecar, advertised apartment prices average €1,200 per square meter, while houses average €590. In Bor, houses range from €1,000 to €1,300 per square meter, a growth linked to investment momentum and new job openings.

Smederevo’s average apartment price stands at €1,355 per square meter, meaning a 50-square-meter apartment costs about €67,750, roughly half the price of a similar flat in Belgrade (€2,630 per sqm, or around €130,000 total) and €50,000 less than in Novi Sad (€2,320 per sqm, or about €116,000).

Nis, the largest city in southern Serbia, averages €1,760 per square meter, with new apartment sales up 60% in the first half of last year. Vranje offers prices as low as €800 per square meter, with top rates reaching €1,300, while Leskovac averages €1,150.

Alexandra Mihajlovic of the 4zida portal noted that rapid percentage growth in smaller cities often reflects low starting prices in underdeveloped markets, making them appealing for long-term investment.

Key factors shaping smaller city markets include local economic conditions, demographics, infrastructure, and property age. Lower wages and weaker economies reduce purchasing power but also keep entry prices low. Population outflows limit local demand yet create opportunities for rental-focused investors. Cities with better infrastructure, such as Nis and Bor, see faster growth in prices and interest.

Experts believe Southeastern Serbia’s combination of low entry costs, steady demand growth, and infrastructure improvements makes it more than just a budget-friendly alternative; it is becoming a strategically smart choice for property investment.