Serbia’s President Aleksandar Vučić made a statement that has sparked significant interest, announcing a major state initiative aimed at addressing one of the country’s biggest challenges for young people — purchasing an apartment. The initiative, developed in collaboration with the National Bank of Serbia (NBS), seeks to create a guarantee scheme and address the issue of down payments, which often hinder young people from buying property. According to the President, the goal is to reduce the down payment to a maximum of 3-5 percent, with monthly installments not exceeding 200 euros.
Vladimir Vasić, a banker and financial advisor, and Mahmud Bušatlija, a consultant for foreign investments, appeared on Kurir Television’s morning program to discuss the details of this new initiative. Both experts offered their insights into the proposed plan, highlighting its potential as well as its challenges.
Vasić acknowledged that the initiative is a good idea but cautioned that it involves a complex process. He pointed out that, although Serbia’s cities like Belgrade, Novi Sad, and Niš face the highest demand for housing, the supply is insufficient. This creates a situation where developers have the opportunity to set high prices, which further distances young people from affording an apartment.
“It’s a good idea, but it’s a complex process. There have been similar ideas and initiatives in the past aimed at helping young people,” Vasić explained. “While the government has previously assisted with VAT refunds for first-time homebuyers and offered incentives for young mothers, these measures have not always been clearly communicated. Many people are still unaware of these benefits, so greater transparency is needed to ensure the initiative’s success.”
He added that the reduced down payment of 3-5 percent could be a significant step in the right direction but emphasized the importance of providing more public information about such programs.
Mahmud Bušatlija, while agreeing that the initiative aims to tackle a pressing issue, expressed concerns about the involvement of banks in the project. He argued that banks do not need additional assistance, as they have been the most profitable sector in Serbia’s economy over the past two decades.
“Banks don’t need help. In the last 24 years, they have generated the largest profits in our economy. You can’t lend money without a bank, but the bank’s position must be such that they don’t expect huge profits,” Bušatlija said. “The key challenge is that interest rates need to be kept low. The real question is whether banks will accept this, given that past projects have not been successful as initially planned.”
Bušatlija also highlighted the difficulties young people face when trying to enter the job market, particularly those with good education and work experience. He pointed out that even young professionals who have completed their studies and gained some practice often struggle to find jobs that pay an average salary of 95,000 dinars.
“How will young people manage to pay even a 3 percent down payment when they are earning so little?” Bušatlija questioned. “There is no clear calculation on how long it would take to repay the loan, and the burden of monthly installments can be overwhelming. This initiative may pump money into the construction industry, but it does not address the fundamental issue of economic insecurity for young people.”
A complex solution to a pressing problem
Both experts agreed that while the initiative addresses a significant problem, the underlying economic realities need to be carefully considered. The lack of affordable housing, high property prices, and low incomes are significant challenges that require more than just financial support. The experts cautioned that without addressing these broader issues, such initiatives may not be sufficient to help young people secure housing.
Vasić and Bušatlija both agreed that transparency, better information and careful planning are key to ensuring that such initiatives can have a lasting positive impact on Serbia’s housing market for young people. However, they emphasized the need for a more comprehensive approach that addresses the root causes of economic challenges facing the younger generation.
