Why Rents Are Rising: Expensive Apartments and a Shortage of Rental Units in Serbia

Rents in Serbia have surged, with prices for one and one-and-a-half-room apartments increasing by an average of 13.5% in May 2026 compared to the previous year. This rise significantly outpaces the annual inflation rate of 3.5%, according to the Republic Statistical Office. Tenants are also facing higher costs for utilities, electricity, and building maintenance, forcing many to allocate over half of their income to rent and bills.

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He increased the rent twice in two years, first by 30%, and then by an additional 25% at the beginning of this year.

Despite the construction of approximately 35,000 new apartments annually, rental prices continue to climb. Žarko Miletić, a Belgrade resident, shared that his landlord raised his rent twice in two years, first by 30% and then by an additional 25% earlier this year. He noted that the landlord cited general market increases as justification, but Miletić suspects other factors may be at play, especially after his wife moved in.

Real estate experts attribute the rising rents to a shortage of affordable rental properties. Dušan Mirkulovski, director of Zidart real estate agency, explained that many investors purchase apartments not for immediate rental income but as long-term investments, contributing to the limited supply of available units. Landlords also factor in their investment returns and interest rates when setting rental prices. For example, a property valued at 100,000 euros might require a 5% annual return, translating to a monthly rent of around 400 euros.

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Many people buy apartments, but they don't rent them out, nor do they live in them; they keep them as an investment. Such apartments are being built because there is demand for them.

While the current rent increases are not considered as dramatic as the 50-60% surge in 2022, experts anticipate a slight rise in rents throughout 2026, particularly affecting smaller apartments. Aleksandra Mihajlović, a real estate expert from 4zida, noted that advertised rental prices have been stable since the beginning of the year but vary significantly based on location and apartment condition.

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If an apartment is worth 100,000, the landlord wants at least a five percent return on investment, which should bring him 5,000 annually, so he rents it out for 400 euros per month.