Restrictive Legislation Keeps Prices Low in Bosnia

“Over the past year, real estate prices have fallen by between 40 and 50 per cent... we are at the most critical point ever because the number of properties available is immense, while demand has fallen radically,” Adnana Masala-Sapcanin, from the Sarajevo-based Gala Real Estate Agency said.

The crisis followed on the back of a sudden hike in real estate sales two years ago, when “property was being sold at unreasonable prices,” Masla-Sapcanin said. “The price per square metre of an apartment in the centre of Sarajevo used to range between €2,000 and €2,500/m2, now, sellers are lucky to make €1,250,” Masala-Sapcanin said.

The situation, she said, had changed radically from earlier times when taking out a housing loan was “as easy as taking cough medicine”.

“Now, the market is mostly driven by parents who sell or exchange their big housing units to buy two smaller ones for them and their children”.

Spaho Ljajic from Sigenx real estate agency said that Bosnia’s market was also hindered by restrictive legislation which obstructs attempts by foreign nationals to acquire property in the country. Ljajic said that although there was interest from Serbians and Montenegrins, they faced significant problems registering their title, despite the reciprocity arrangements Belgrade and Podgorica have with their Balkan neighbour.

According to the existing legislation in Bosnia’s Croat-Bosniak (Bosnian Muslim) region, foreign nationals are entitled to own property there only if they have residence, a registered business or investment projects in Bosnia, the president of the region’s public notary chamber, Sefedin Suljevic, told Belgrade Insight.

However, the Justice Ministry of Bosnia’s Croat-Bosniak federation is currently devising a new law which should significantly liberalise the property purchase and registration procedure for foreigners.

“The new law should make 12 laws currently in force redundant and regulate the matter in a systematic and liberal manner,” Justice Ministry spokesman Entoni Seperic said.

Seperic said the new law had already been drafted and was being fine-tuned before it is sent for adoption by the Croat-Bosniak parliament in May.

Serb dominated Republika Srpska has already adopted a new, liberal and all-encompassing real property law which came into force on January 1 this year.