Real estate in Romania is at its lowest value in the last 8 years

According to the quarterly market study by The Concept – Residential Real Estate Market Analysis in Romania in Q2 2023, prices in absolute figures have recorded the lowest growth in the last year compared to the past 8 years. Thus, on a national level, the average price per square meter has remained relatively stable in the past year, hovering around 1,420 euros, with only a 0.5% increase compared to the previous year, 2022. Maintaining price levels in the current market conditions reflects the resilience of the real estate market in Romania.

Taking into consideration the inflation recorded between June 2022 and June 2023, we can observe that in real terms, the average price of properties in Romania has suffered a decline of nearly 9 percent. The Concept’s estimate for Q2 2024 suggests a growth of +6.8% compared to the current figures, considering the National Bank of Romania’s inflation estimate of 4.9% at the time of calculation.

“If you judge based on the overall sentiment, you might be inclined to believe that real estate prices are gearing up for a correction. However, all the data show a kind of calm before the storm, comparable to the period of 2002-2004, the period preceding an explosive market growth from 2004-2008. I advise those interested in investing in real estate to gather information from factual data and not from uninformed opinions. The chances of Romania’s economy growing significantly and, subsequently, the real estate market, are very high,” said Daniel Tudor, CEO of The Concept.

Bucharest continues to have the most affordable prices compared to the average wage, with a Purchasing Power Index of only 1.23. The capital is followed by Timișoara – 1.41, Iași – 1.55, Constanța – 1.83, Brașov – 1.92, and at the top of the list is the usual Cluj-Napoca with a PPI of 2.2.

In terms of yield, except for Timișoara, all major cities are experiencing increases in investor yields, which will once again attract skeptics to the real estate market. Cities like Brașov, Constanța, or Iași offer average yields of over 6% for all types of apartments.

In conclusion, on average, housing in Romania has become more affordable as the Purchasing Power Index is decreasing. In Q2 2023, the PPI is 1.55 at the national level, the lowest level recorded in our data.

For more information, the market report can be downloaded here. Among the analyzed data are the average housing prices in Romania in real value, adjusted for inflation and adjusted for the evolution of the average salary, the most affordable homes in Romania, the cash vs. credit ratio at the national level in residential purchases, the average gross yield of real estate investments in studios, 2, and 3-room apartments, the number of individual units transacted in Q2 2023 at the national level, and the affordability of housing in relation to the Purchasing Power Index.

The analysis is conducted by The Concept’s Market Research department. The study aims to combine relevant factual data into aggregated indicators to provide greater clarity in the housing market and its potential future evolution. The data that formed the conclusions of the report were processed by The Concept based on publicly available data provided by INS, BNR, ANCPI, and Imobiliare.ro.

The data and conclusions of this study can be shared further by attributing them to: Source: The Concept, based on publicly available data provided by the organizations mentioned under each of the charts in the report.