In the country, a Romanian needs 1.5 times the average net salary for one square meter of housing

According to the quarterly market study by The Concept – Residential Real Estate Market Analysis in Romania in Q3 2023, in real terms adjusted for inflation, the average price of homes in Romania has appreciated by 39.7% compared to 2014, the minimum level from which the new real estate cycle, in which we currently find ourselves, began. The Concept’s estimate for Q3 2024 assumes a growth of +4% compared to present figures, taking into account the National Bank of Romania’s inflation estimate of 5.7% at the time of calculation.

“I would like to say that prices will decrease, but all the data shows the opposite. However, with the increase in prices, the yields that investors can obtain also increase, so there is a silver lining. This is why I encourage everyone looking to buy a home to do so as soon as possible because we are entering an upward trend in the real estate cycle, and prices will rise more and faster than we think in the coming period,” said Daniel Tudor, CEO of The Concept.

In the first three quarters of the year, we observe a decrease in the number of individually traded units compared to the same period in 2021 and 2022. However, at the country level, the number of individually traded units is still higher than in 2018 and 2019. Compared to the same period in 2022, there were 16.3% fewer transactions of individually owned units, with the major impact being in the first two quarters.

Nationally, approximately 6 out of 10 apartments were purchased through self-financing, as many mortgages were registered only for refinancing existing loans. The low number of real estate transactions does not significantly impact prices because, as mentioned above, data shows that in major cities in Romania, over half of transactions are done without credit. Brasov continues to lead with almost 7 out of 10 properties purchased from personal sources. Conversely, Constanta has only 50% of transactions conducted in cash, making the market more vulnerable as long as interest rates are high.

Regarding yields, rising rents in Bucharest continue to provide yields of over 7% to those who choose to invest in the capital. Similarly, cities such as Brasov, Constanta, or Iasi offer average yields of over 6%, while Cluj-Napoca and Timisoara offer average yields of under 5 percent.

However, in Bucharest, the volume of transactions is also on a downward trend, with the volume of transactions exclusively in Q3 2023 decreasing by 9% compared to the same period in 2022.

In conclusion, following the national trend, all major cities in Romania are experiencing a decline in the number of transactions of individually owned units for the second consecutive year. Despite significantly fewer transactions, property prices in these cities have remained constant, without sharp declines. Once again, these data demonstrate the resilience of the real estate market in Romania.

For more information, the market report can be downloaded here. Among the analyzed data are the average prices of homes in Romania, adjusted for inflation and adjusted for the evolution of the average salary, the most affordable homes in Romania, the cash vs. credit ratio nationally in residential acquisitions, the average gross return on real estate investments for studios, 2, and 3-bedroom apartments, the number of individually traded units in Q2 2023 nationally, and the accessibility of homes 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 that provide greater clarity in the housing market and its potential future evolution. The data that formed the conclusions of the report was 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 further disseminated by mentioning: Source The Concept, based on public data provided by the organizations mentioned under each chart in the report.