News 11 Feb 13

Macedonia Beefs Up Subsidies for Home Buyers

After a disappointing lack of interest in the scheme, the government has increased the subsidies on offer to would-be real estate purchasers.

Sinisa Jakov Marusic
BIRN
Skopje

Photo by: Sinisa Jakov Marusic

Starting this month, the government has increased the size of its subsidies to buyers to make the campaign to buy homes more attractive, after only 130 subsidized housing loans were approved in 2012.

Instead of covering half the monthly bank mortgage, the government is now offering to cover 75 per cent for new flats and houses for the first five years, but only for properties that cost under 900 euro per square metre.

“These changes will serve as an incentive for increased usage of the funds envisaged for this project,” Finance Minister Zoran Stavreski said.

This means that for a flat costing 50,000 euro the state is now willing to pay 15,000 euro through subsidies. New owners will now also have the right to pay off their loans early, after the tenth year.

The bid, launched last February, has attracted disappointingly little attention.

Although the government initially hoped for 2,000 applications immediately after the launch of the campaign, data reveal that only 130 subsidized housing loans were approved during the entire year.

Some real-estate agencies say that the main cause for the low interest is the high price of real estate. They say it is hard to find a decent flat for less than 900 euro per square metre.

“The best option would be to build flats under private-public partnership with the state that would sell cheaper,” says Marija Todorovska, from Skopje's Avenija real estate agency.

A square metre in a flat in the Macedonian capital now sells on average for between 1,000 and 1,500 euro, statistics show. This makes purchasing a home for people on average salaries of about 330 euro a month almost impossible.

However, the ministry insists there are enough cheap flats available and that their campaign still intends to help people on modest incomes get a roof over their heads.

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