WHO IS BUYING REAL ESTATE IN SMALL MUNICIPALITIES OF REPUBLIKA SRPSKA

The real estate market in several extremely small and underdeveloped municipalities in Republika Srpska has practically come to a standstill. Throughout the entire past year, some local communities did not record a single sales contract for residential buildings, land, or forests. In response, local authorities are trying to revive their economies by developing specific tourism potential and building small weekend-home settlements.

Data from the Republic Administration for Geodetic and Property Affairs (RUGIP) for 2025 confirms these worrying trends.

According to the annual real estate market report for last year, no property or forest transactions were recorded in Berkovići, Istočni Drvar, Istočni Mostar, or Kupres. Even in municipalities where a small number of contracts were signed, it is evident that economic power and demand are increasingly concentrated in several larger cities.

Kupres Has Around 250 Residents

Kupres Mayor Srđen Petković says the municipality is an extremely rural area with a very small population, which naturally limits interest in real estate.

“According to the voter registry, we have around 315 residents, but in reality no more than 250 people live here,” Petković said.

He explains that most people originally from the area already own family land or inherited property.

“This is a rural community and most people who come from here have their ancestral land, so they usually build or work on their own property,” he added.

In an attempt to revive the area, the municipality is planning to build a small tourist complex that would include a weekend-home settlement.

“We have adopted a regulatory plan and are planning a tourist complex with 12 weekend houses on municipal land. The next step is land parceling, after which we will be able to offer plots to interested buyers. Our intention is to attract visitors because we are located on the route toward the Adriatic coast, and there is also a ski resort nearby,” Petković explained.

According to him, the municipality plans to provide basic infrastructure such as an access road, electricity network, and sewage system to ensure that construction is carried out in an organized way.

“Our budget is small, but we will try to provide the basic infrastructure and offer the plots at favorable prices, with the condition that construction follows a unified mountain style and complies with regulations,” Petković said

Little Interest in Property in Istočni Mostar

A similar situation exists in Istočni Mostar, where Mayor Božo Sjeran says there is almost no demand for property purchases.

“In our municipality the land is not particularly attractive, so there is not much interest,” Sjeran said.

However, he notes that there has recently been some interest in weekend-home settlements and tourism projects.

“We hope this trend might continue,” he added.

The municipality, he said, is trying to support anyone interested in building or investing.

“The diaspora mainly renovates family houses on their own land, and there is some new construction as well, but it is mostly on private property,” Sjeran said.

What Real Estate Agencies Say

Dragan Milanović, director of the Banja Luka real estate agency Remax, says the situation in smaller municipalities is complex and that Bosnia and Herzegovina effectively does not have a single unified real estate market.

“The market in larger cities is active, with ongoing construction and sales. But in small municipalities where depopulation is happening, there is simply no demand. When there is no demand, there is no incentive to build,” Milanović said.

Occasionally, he added, land or weekend houses are sold in areas with some tourism potential, especially mountain locations near larger cities.

“Around Banja Luka there are occasional sales in Kneževo, Ribnik, or Šipovo because those places have natural potential and are relatively close to the city. But in municipalities without tourist attractions, there is practically no market activity,” Milanović explained.

He also noted that the habits of people from the diaspora have changed. In the past, many built houses in their hometowns, but today they invest their money differently.

“Younger generations from the diaspora now invest more rationally. They buy apartments in larger cities like Banja Luka or property in tourist centers because they can rent them out or sell them later. In small municipalities, existing houses often do not even have a clear market value,” Milanović emphasized.

According to him, the revival of the real estate market in small municipalities is only possible if economic activity increases and the population remains in those areas.

“If people continue to live there, there will be a need for real estate. Without that, it is difficult to expect any real market activity,” Milanović concluded.

Prices

A comparison of annual real estate market reports for 2024 and 2025 shows significant price fluctuations for newly built apartments in several cities in Republika Srpska. The largest increase was recorded in Trebinje, where the price per square meter rose by more than 30 percent, as well as in Teslić and Zvornik. The biggest decline was recorded in the area of Pale, particularly on Jahorina.

Despite these differences, overall market activity slightly increased. The number of real estate contracts in 2025 was about 2.5 percent higher than the year before, while the total value of transactions grew by roughly 15 percent.