Adjusted for the average salary evolution, the average real price of housing in Romania has decreased by 11.3% compared to 2014.
According to The Concept’s quarterly market study – Analysis of the residential market in Romania in Q1 2023, the average price of housing in Romania has decreased by 11.3%, adjusted for the evolution of the average salary, compared to 2014, which marked the minimum level from which the current real estate cycle started. Additionally, the Purchasing Power Index has declined nationwide, indicating that, on average, housing in Romania has become more affordable in Q1 2023 compared to the previous year. In Q1 2023, the PPI reached 1.65 at the national level, the lowest level recorded in our data.
However, the data shows that the number of individual units transacted in Q1 2023 at the national level has decreased by 23.5% compared to the same period last year, from 42,657 to 32,634. Similarly, the capital city has seen a decrease of approximately 21.5% in the transactions of individual units, from 12,947 to 10,146 units transacted.
“We are currently facing a challenging period where it is easy to make decisions based solely on the negative news that we encounter everywhere. With this quarterly report, we aim to help those with real estate needs, whether for living or investment, make decisions with confidence, knowing that the Romanian economy and its real estate market have fantastic latent growth potential in the coming years. The figures in this report demonstrate that,” said Daniel Tudor, CEO of The Concept.
Rents have increased in all major cities, and in terms of investment, the average gross yield of real estate investments has also increased. For studio apartments, the gross yield has increased in most major cities in Q4 2022, reaching values between 4.3% in Cluj-Napoca and 6.96% in Bucharest. Two-room apartments also offer a high yield in most major cities, ranging from 4.23% in Cluj to 6.55% in Bucharest.”
The most affordable housing in Romania among major cities is in Bucharest, with a Purchasing Power Index indicating a ratio of 1.34 for Q1 2023, closely followed by Timișoara (PPI 1.56) and Iași (PPI 1.61). Moving past Brașov and Constanța (PPI 1.97 and 2, respectively), we reach the most expensive city in this regard, Cluj-Napoca, which registers a ratio value of 2.27, remaining constant in recent years.
In conclusion, we analyze the Cash vs. Credit report, which predicts how the market can evolve in the upcoming period. This quarter, the increase in IRCC and ROBOR rates has put significant pressure on those with loans and has made it challenging for those looking to take this step. By reading this report, we can observe that interest rates have less influence on less than half of investors, with the majority having the necessary power to buy with cash.
For more information, the market report can be downloaded here.
Among the analyzed data are the average real housing prices in Romania, adjusted for inflation and the evolution of the average salary, the most affordable housing in Romania, the cash vs. credit ratio in residential acquisitions at the national level, the average gross yield of real estate investments for studio apartments, 2-room and 3-room apartments, the number of individual units transacted in Q1 2023 at the national level, and the housing affordability in relation to the Purchasing Power Index.
The analysis is conducted by the Market Research department of The Concept. 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 yielded the report’s conclusions 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 disseminated further by mentioning: Source: The Concept, based on publicly available data provided by the organizations mentioned under each chart in the report.
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