Adjusted for inflation, housing in Romania became cheaper in 2022

According to The Concept’s quarterly market study – Residential real estate market analysis in Romania in Q4 2022, the average price of housing in relative figures, adjusted for inflation, decreased by 6.5%. Although in absolute figures, the average price increased by 8.8% compared to the same quarter of the previous year, the inflation rate of 16.4% eroded the average market value per square meter of properties, so in relative values, we can say that housing has become cheaper.

Also, in value adjusted for the evolution of the average salary, the average price of housing in Romania decreased by 4.1% in Q4 2022 compared to the previous quarter. If we compare it to 2008, the peak of the previous cycle, adjusted for the evolution of the average salary, the average price per square meter of housing has decreased by 60.3% compared to 2008, and it has also decreased by 14.3% compared to 2014, the minimum level from which the new real estate cycle started.

“We are currently in a moment of tumult in the current real estate cycle, which can lead to a temporary correction in the short term and in certain market categories. This is already happening if we take into account prices adjusted for inflation, but more importantly is what will probably happen at the end of this correction period. The most likely scenario further is that of an explosive growth in the market, similar perhaps only to the growth in the period 2004-2008, which led to record prices and transaction numbers compared to the beginning of the period,” said Daniel Tudor, CEO of The Concept.

The most affordable homes in Romania among the major cities are still in Bucharest, with the purchasing power index indicating a ratio of 1.62 for Q4 2022, a value 2.5 times lower than in 2008, closely followed by Timișoara (PPI 1.66). Passing through Brașov and Constanța (PPI 2.09 and 2.05, respectively), we reach the most expensive city in this respect, Cluj-Napoca, which records a PPI value of 2.44, still 1.6 times lower than in 2008.

If we are talking about the average gross yield of studio apartment real estate investments, it has increased in most major cities in Q4 2022, reaching values between 4% in Cluj and 6.67% in Bucharest. Two-room apartments also bring a high yield, in most major cities, reaching values between 4.16% in Cluj and 6.07% in Bucharest. If we are talking about three-room apartments, the yield has also evolved predominantly upwards in Q4 2022, reaching values between 4.31% in Cluj and 5.94% in Constanța, with the capital city reaching 5.72%.

The analysis was carried out by The Concept’s Market Research department. The study aims to combine relevant factual data into aggregated indicators that bring greater clarity to the housing market and its potential future developments. The data that led to the report’s conclusions were processed by The Concept based on public data provided by INS, BNR, ANCPI, and Imobiliare.ro.

The data and conclusions of this study can be shared by mentioning the source as The Concept, based on public data provided by the organizations mentioned under each chart in the report.

Download the study here.