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North Macedonia: The Growth of Real Estate Prices and the Demand for Buying and Selling Real Estate

North Macedonia: The Growth of Real Estate Prices and the Demand for Buying and Selling Real Estate

Issue 11.2
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In recent years, the real estate market in the Republic of North Macedonia, particularly in its capital city of Skopje, has witnessed significant activity. Statistics indicate a consistent trend of construction and sale of numerous residential apartments. Notably, despite the steady increase in real estate prices since 2021, there has been a notable surge in demand for residential apartment purchases. Concurrently, investor interest in constructing residential and office buildings remains robust, showing no significant signs of decline.

From a statistical perspective, there were 4,069 building permits issued in 2021, followed by 3,930 approvals in 2022, and 3,639 permits granted until November 2023. While these figures indicate a slight decline in the number of approvals in specific years, it’s noteworthy that the estimated value of the buildings, as per the information provided in the approvals, consistently rose. In 2023, the estimated value of the approved buildings was 30% higher than those of the preceding year. In this context, during the last quarter of 2021, apartment prices surged by 11.3% compared to the corresponding period in the previous year. This upward trajectory persisted in subsequent years, notably in 2022, where prices soared by 20.5% in the last quarter compared to the same period in 2021. Furthermore, in the last quarter of 2023, prices continued their ascent, rising by an additional 7% compared to the preceding year.

Conversely, despite the consistent growth in housing prices without any signs of decline, there hasn’t been a corresponding decrease in housing demand, which would have been economically anticipated. This is evidenced by the ongoing practice of purchasing and selling apartments even during the construction phase, prior to the laying of building foundations.

Purchase and Selling Apartments During the Construction Phase

According to Macedonian legislation, particularly the provisions governing sales agreements outlined in the Law on Obligations, Law no. 18/01, 04/02, 05/03, 84/08, 81/09, 161/09, 123/13 215/21, 154/23, sales may extend to future objects.

This legal provision enables the possibility of entering into pre-agreements for the sale of apartments, allowing parties to establish conditions such as purchase price, construction timeline, transfer of ownership, and handover of possession. However, the actual sale and transfer of ownership rights occur only after the completion of construction and registration in the title deed under the investor’s name. The pre-agreements for the purchase and sale of real estate must be notarized by a competent notary public, and the conclusion of the pre-agreement by the contracting parties is also recorded in the Construction Pre-notification Sheets. This process aims to prevent issues like the double sale of an apartment or similar disputes that may arise when purchasing a unit within a future building.

The Construction Pre-Notification Sheets is a specialized document issued by the Real Estate Cadastre Agency of the Republic of North Macedonia. These contain essential information such as data on the investor, data on the cadastral parcel on which the construction is being carried out, the apartment area, auxiliary premises details, and similar data. They serve the purpose of identifying apartments under construction. Notably, it’s crucial that pre-agreements for sale are recorded in these construction notice sheets. This measure safeguards buyers’ interests from potential multiple sales of apartments by investors as the notice is accessible to anyone requesting the issuance of the Construction Pre-Notification Sheet. This service is easily available to any interested citizen and, of course, to legal professionals, which contributes to the reliability of the entire process of buying and selling and drawing up pre-agreements.

From our analysis, it’s evident that in recent years, despite the ongoing development of the city of Skopje in the Republic of North Macedonia, the real estate market remains robust and far from saturated. Investor interest in constructing new residential and commercial properties remains high while, simultaneously, the prices of real estate continue to escalate. Furthermore, the demand from both citizens and legal entities for purchasing newly constructed apartments and commercial spaces shows no signs of diminishing.

By Ljupka Naumoska Gjorgjievska, Head of Real Estate, and Elena Kuzmanovska, Attorney at Law, Tosic & Jevtic

This article was originally published in Issue 11.2 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

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