How will the fall in iron and steel prices affect real estate prices in Serbia?

Steel and iron prices are falling on world stock markets and that could be the reason for the reduction of real estate prices after the continuous growth during the last year and a half.

Construction industry (Photo: Pixabay)

During the last 2 weeks, a serious decline in the value of iron prices has been noticed on global markets. According to the tradingeconomics website, the price of pig iron per ton is currently $ 117, while on June 8, it was $ 142.4 per ton. Given that steel has a very wide range of uses in several industries, including construction, the costs of these industries are now beginning to fall, and will ultimately result in falling real estate pricesreports Blic.

The fall in prices will not be immediate, because one investment cycle in, for example, the construction of a residential building lasts 2 to 3 years, so if the fall in prices of materials, in this case steel, continues to fall in price per square meter will continue. feel only when apartments built with these materials appear on the market.

Domestic experts believe that it is situation in our market somewhat more complicated and that prices will not flow directly, ie. to decline.

– We are 2 to 3 years behind the world trends. First something appeared in the USA, then in Europe, and only then in our country. Autumn will clarify many things regarding the price, considering the Russian and Ukrainian crisis, and the lack of materials. There will be less construction, there will be less supply, but there will always be demand. At our place we can expect prices to calm down, so the jump will not be safe. Prices are already falling in some parts of Serbia, real estate appraiser and real estate expert Milić Đoković told “Blic Biznis”.

Referring to the fall in the prices of iron and steel on the world stock exchanges, he points out that it is a bigger problem of energy prices.

– It is difficult to fit everything that is happening. The price of steel is falling, but the price of energy is still at a record high, and that steel must be transported to the construction site. For example, all the plastic used in construction has become much more expensive, chemistry, varnishes, parquet also jumped. In the last resort, the price of the master jumped, that is. of their work, Djokovic enumerates.

He adds that iron and steel are stock exchange goods that are brought by barges and that thousands of tons need to be bought in order for that to have an effect on the market.

– The problem of our suppliers is that they do not have a real warehouse. We now have a situation where the material from the ship goes directly to the truck and the direction of the construction site. We do not have a logistics center, and we need to work on thathe says for Blic and adds that this spills over to customers by offering them a “floating price”, because it is not known when and how the necessary materials will be obtained.

– We certainly have a “halo effect” on the market. When the price of materials would eventually fall, it is only important that two or three investors lower the price and the others will followhe states.

The latest RGZ report states that it is in a year the price of residential square meters in the whole of Serbia increased from 5 to 23 percent. Both old and new construction became more expensive, and the biggest jumps in price were recorded in Nis, while the smallest were in Kragujevac, reports Blic.

The cheapest square in the capital in apartments that already had owners was 400 euros, the most expensive 4,902 euros, and an average of 1,680 euros, the report states. When it comes to new apartments, prices range from 600 to a staggering 9,115 euros, while the average square footage of new construction is 2,165 euros. An apartment in a new building in Novi Sad costs an average of 1,505 euros per square meter, 16 percent more than a year ago, and in an old building it rose from 1,255 euros to 1,517 euros. In Nis, a 50-square-meter apartment in an old building is more expensive by almost 10,000 euros. Instead of last year’s price of 831 euros, now the square is on average 1,020 euros, which is an increase of as much as 23 percent.

Source: – VESTI by

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