Inflation in Serbia is expected to gradually slow down over the next two years, and by the end of 2025, the National Bank of Serbia (NBS) will impose a cap on the maximum interest rate for housing loans, limiting it to five percent. This was announced by NBS Governor Jorgovanka Tabaković during the presentation of the November 2024 inflation report.
The implications of these developments on the Serbian economy and personal finances were explored in the program “Pulse of Serbia,” with insights from Dušan Mirkulovski, a real estate agent, and Dušan Uzelac, a representative from the Kamatica portal.
Uzelac explained the significance of the interest rate cap, emphasizing that it provides stability for loan borrowers:
- “The key benefit here is stability. When someone takes out a loan, the big question is whether they can afford to repay it. This new measure signals stability, which is crucial because it allows people to calculate home loan affordability with more confidence.”
Mirkulovski agreed, highlighting the potential positive effects on citizens:
- “Credit is an economic lever, and this move will stimulate the market. As more people become eligible for housing loans, we can expect an increase in buyers, which could drive up property prices. With lower interest rates, individuals will be able to borrow more for the same salary, leading to more favorable conditions for potential homeowners.”
Uzelac also discussed the potential for greater competition among banks:
- “While the interest rate cap sets an upper limit, this could encourage banks to offer more attractive terms. With over 20 banks operating in Serbia, only a handful are active in the housing loan market. This could motivate them to compete more aggressively to attract customers by offering better loan conditions.”
As Serbia navigates these changes, the housing market is likely to see shifts in both lending practices and consumer behavior, potentially leading to increased demand for property and more favorable financing options for homebuyers.
