The transition from a centrally-planned to a
market-oriented economy has entailed
different financial dilemmas in the countries
of the former Yugoslavia1
, and housing
finance is one of them. The change of the
political system and the wars are among the
reasons for recession and the collapse of
the housing market (Pichler - Milanovich,
2001). During this time, housing policy was
not a political priority (Tsenkova, 2003).
Today, these countries are characterised by
high home ownership rates due to a
privatisation wave of state owned property.
However, housing finance is still
progressing at a slow pace in most of the
countries which still reflects the poor legal
conditions and the lack of long-term funds.
Besides the demand for modernisation and
renovation of the existing housing stock,
there is also a considerable need for new
housing which is partly the result of an ongoing
migration from rural to urban areas in
search of employment.
These changes require the creation of a
sustainable model for funding home
construction that is based on domestic
sources, regional cooperation and foreign
investors. The introduction of housing
programmes will mitigate some of the basic
problems that are a threat to the region,
such as demographic problems and social
stratification, which may produce long-term
negative effects for the whole region and the
European integration process, if they are not
solved in a proper way.