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Macedonia is enjoying a house price boom, thanks to a stronger economy and a more stable political environment.

The average price of new dwellings rose 13.8% to Macedonian denars (MKD) 45,489 (€744) per sq. m. in 2007, from MKD 39,973 (€654) in 2006. In 2006, the average price surged 21.3% y-o-y, after falling 17.7% in 2005, according to the State Statistical Office.

Average property prices in the capital, Skopje rose 15.8% from MKD 41,342 (€676) per sq. m. in 2006 to MKD47,859 (€782) per sq. m. in 2005.

However, Macedonia’s troubles are still far from over. Although the 2001 war between the Macedonian Slav-dominated government and the Albanian minority has been resolved quickly, there is still inter-community tension (the population is about 65% Macedonia Slav, 25% Albanian).

The dispute over the name “Macedonia” has prompted Greece to block the country’s membership of the Nato and EU (see below). These issues hound the economy, and thus the real estate market.

The housing finance market is still underdeveloped. Despite rapid growth in household lending since 2003, outstanding housing loans were still around 1% of GDP in 2007.

Foreigners cannot buy land in Macedonia. They can buy apartments and buildings subject to the reciprocity rule and approval from the Ministry of Justice.

Source and copyright: http://www.globalpropertyguide.com/Europe/Macedonia