The demand for housing in Romania remains strong, supported by growing wages and improved lending conditions; however, the continued stagnation in new development and political uncertainty tied to upcoming elections threaten the delicate market balance. 

This extended overview from the Global Property Guide covers key aspects of Romania’s housing market and takes a closer look at its most recent developments and long-term trends.  

Table of Contents

• Housing Market Snapshot
• Historic Perspective
• Demand Highlights
• Supply Highlights
• Rental Market
• Mortgage Market
• Socio-Economic Context

Housing Market Snapshot

Residential property prices in Romania continue to rise in line with the European Union average. According to Eurostat, the House Price Index in the country increased by 3.9% year-on-year as of Q3 2024 (-1.3% when adjusted for inflation), closely mirroring the EU average growth of 3.8%. The index for new dwellings rose by 6.8% year-on-year (1.4% inflation-adjusted) while existing dwellings saw a more moderate increase of 2.4% (-2.8% inflation-adjusted).

Romania's house price annual change:

Data Source: Imobiliare.ro.

Data from real estate portal Imobiliare.ro indicates that the average listed price for apartments in Romania reached EUR 1,710 (USD 1,791) per square meter, marking a 14.0% year-on-year increase. Among key submarkets, Cluj-Napoca recorded the highest prices at EUR 3,000 (USD 3,142) per square meter, reflecting an annual growth of 15.7%. In Bucharest, the average listing price stood at EUR 1,862 (USD 1,950) per square meter, up 15.0% compared to the previous year.

The average listed price for apartments in key submarkets:

Looking ahead to 2025, real estate experts maintain a cautiously optimistic outlook. Analysts at Colliers Romania suggest that even a modest pickup in economic activity could sustain the housing market's positive trajectory. A stable labor market, rising wages, declining interest rates, and consumer confidence nearing levels last seen in 2007-2008 are expected to further support demand. Additionally, if supply constraints persist and the broader economy sees gradual improvements -absent significant tax policy changes - prices may accelerate over the medium term. Daniel Crainic, Marketing Director of Imobiliare.ro, highlights the widening gap between supply and demand, stating: "Prices will continue to rise, particularly given the imbalance between supply and demand. However, we hope that this growth remains within reasonable limits to prevent market overheating."

Historic Perspective:

Evolution of Residential Real Estate Landscape in Romania

Romania's real estate market experienced a significant boom in the early 2000s, driven by strong economic growth and increasing investor confidence. The country's accession to the European Union in 2007 further accelerated this trend, attracting substantial capital inflows and stimulating demand. Banks offered mortgages with low interest rates and favorable terms, making homeownership more accessible. Rising GDP and growing consumer confidence fueled higher demand for residential properties, leading to rapid market expansion.

The 2008 global financial crisis brought this momentum to an abrupt halt. As the economy entered a severe recession, unemployment rose sharply, reducing purchasing power and dampening interest in real estate. Banks tightened lending conditions, restricting access to mortgages and suppressing residential market activity. By 2010, the House Price Index had declined by an average of 7.5% year-on-year, while the number of residential permits issued dropped by 13.6% annually.

Between 2011 and 2014, Romania's economy began a slow recovery. Although home purchase intentions remained below historical averages, they showed gradual improvement, supported by rising wages and increasing purchasing power. By the end of 2014, house prices and construction activity had largely stabilized, laying the groundwork for renewed market confidence.

From 2015 to 2017, steady GDP growth strengthened consumer sentiment and homebuying activity increased. Government-backed initiatives, such as the Prima Casă program, made mortgages more accessible, particularly for young people and first-time buyers. Low interest rates further stimulated demand, with the House Price Index rising by an average of 6.04% in 2017. The number of newly completed dwellings also saw a 6.3% year-on-year increase, reflecting renewed confidence in residential construction.

The real estate market remained dynamic from 2017 to 2020, with sharp fluctuations driven by economic events and policy shifts. The COVID-19 pandemic initially disrupted market activity, but strong economic stimulus measures supported a swift recovery. Changing consumer preferences increased demand for larger homes, and residential sales surged in 2021-2022, averaging 180,000 transactions per year. The House Price Index rose by an average of 5.79% over this period, supported by strong economic growth and historically low interest rates.

In 2023, residential sales saw a significant decline in the first half of the year compared to the post-pandemic peak, although a recovery emerged later. Despite this, transaction levels remained lower than the record highs of the previous two years. When compared to 2017-2019, however, sales activity remained strong, and home prices continued to rise, albeit at a slower pace than wage growth. As the market entered 2024, it maintained momentum despite elevated interest rates. Home purchase intentions stayed near record highs, even surpassing 2006-2008 levels. At the same time, supply-side constraints, reflected in fewer completed dwellings and modest permit issuance, put continued upward pressure on prices.

Annual house price change (based on end-of-year Eurostat House Price Index):

Construction activity dynamic (authorized and completed housing units):

Data Source: INS.

Demand Highlights:

Residential Sales Rebound Driven by Improved Affordability and Financing Conditions

After a decline in sales transactions in 2023, Romania's residential property market saw a notable resurgence in 2024. According to data from the National Agency for Cadastre and Land Registration (ANCPI), nearly 169,000 residential units were sold nationwide, reflecting a 6.63% year-on-year increase.

"2024 was a strong year for the local residential market, with demand surpassing expectations despite earlier cautious forecasts. Key drivers of this growth included rising wages, improved affordability, and lower fixed interest rates," stated Andrei Sârbu, CEO of SVN Romania. Expanding on these factors, Andreea Popa, Senior Consultant at Imobiliare.ro Market 360, noted: "The prospect of interest rate cuts provided many buyers with the confidence to proceed with their purchases. At the same time, some prospective buyers recognized that postponing their decision was no longer viable, given the continuous rise in property prices and the decreasing availability of homes."

Data Source: ANCPI.

The Bucharest-Ilfov region accounted for the largest share of transactions, representing 36% of the total market. Nearly 60,500 residential units were sold in this area, marking a 7.66% year-on-year increase. The highest growth was recorded in Iași county, where demand surged by 38.52% year-on-year, followed by Constanța county with a 17.84% increase. In contrast, the county of Brașov experienced an 11.05% decline in the number of residential units sold.

Number of residential units sold in key submarkets:

Experts anticipate continued positive momentum in residential demand to maintain throughout 2025, though market sensitivity to broader macroeconomic and political factors remains a key consideration. "The residential market is delicately balanced. While demand has remained strong, supported by relative economic stability, it remains highly susceptible to shifts in the socio-political landscape. Any signs of instability - whether economic, political, or social - could dampen buyer activity. The upcoming presidential elections in the spring, along with potential tax increases or government instability, will likely influence market trends in the year ahead," observed Daniel Crainic, Marketing Director at Imobiliare.ro.

Supply Highlights:

Housing Completions Drop While Permit Issuance Shows Signs of Recovery

Residential construction activity in Romania remains subdued, with provisional data from the National Institute of Statistics (INS) showing 42,312 residential units completed in the first three quarters of 2024, marking a 15.26% year-on-year decline. According to experts from SVN Romania, this significant drop in deliveries reflects the challenging macroeconomic conditions of 2023, when fewer new projects were initiated. The sharp decline in building permits issued in the previous years also contributed to the slowdown.

*Provisional data.
Data Source: INS.

The geographic distribution of new developments in Q1-Q3 2024 was led by the Bucharest-Ilfov region, which accounted for approximately 28% of all new units. At the same time, this region recorded the third-largest decrease in completed dwellings, with a 21.06% year-on-year drop. SVN Romania estimates that total completions in the capital region for the full year will reach approximately 17,500 homes, reflecting an annual decline of 16.50%.

Number of new dwellings completed, by development region:

Despite subdued construction activity, early signs of a potential shift in supply dynamics are emerging. After two consecutive years of significant year-on-year declines in residential building permits issued (-14.87% in 2022 and -20.65% in 2023), the trend reversed in 2024. The INS data indicates that 35,667 residential buildings were authorized nationwide, representing a modest 2.95% year-on-year increase.

Data Source: INS.

The majority of residential building permits were issued in the North-East region (20%), followed by South-Muntenia (16%) and North-West (15%). The Bucharest-Ilfov region accounted for 3,833 permits, marking a 5.6% year-on-year increase and representing 11% of the total permits issued.

Number of residential building permits issued, by development region:

While the return to growth in permit issuance suggests a stabilization, the number remains significantly below previous highs. 2024 levels are still 30.46% lower than the most recent peak of 2021, pointing to stagnation in construction activity rather than a sharp recovery. SVN Romania experts project a further decline in completed homes in 2025, with the growing imbalance between supply and demand continuing to exert upward pressure on residential prices.

Rental Market:

Rents Continue Growing Nationwide, Available Offer Down in the Capital

Throughout 2024 rental inflation in Romania (measured by the annual change in actual rentals for the housing component of the consumer price index) demonstrated strong fluctuations, but generally trended significantly above the all-items inflation and was most recently reported by the INS at 10.5% in December 2024.

According to the latest report from the property platform Storia, rents across Romania increased by 15% on average in 2024 compared to 2023, and the overall activity in the rental market was lower than in the sales segment.

"Comparing the rental market with the purchase market, we note that Romanians showed greater interest in purchases than in rentals. Although contacts [engagements with listings on the platform] on the rental market increased, this increase was more moderate compared to the purchase market," said Monica Dudău, Senior Marketing Manager at Storia & OLX Imobiliare.

Data Source: INS.

The average asking rent per residential unit in Romania reached EUR 500 (USD 549) in Q3 2024, according to reporting from the property platform Imobiliare.ro, up from EUR 468 (USD 509) during the same period a year prior. The highest average rents were observed in Cluj-Napoca, which surpassed even Bucharest.

Within the capital city, monthly rents varied from EUR 420 (USD 461) in Drumul Taberei district to EUR 2,000 (USD 2,197) in Primăverii. Bucharest accumulated the majority (61%) of properties listed for rent in the six major Romanian cities. At the same time, the report noted a considerable narrowing of the available offer in the capital (-33% year-on-year).

Average asking rents per submarket and unit type:

According to the research carried out by the Global Property Guide in January 2025, gross rental yields for residential units in Romania averaged 6.55%, slightly up from 6.46% previously reported in June 2024. Regionally, the highest yields among the assessed submarkets were observed in Galați (8.77%) and Constanța (8.21%), while Timişoara (5.78%) and Cluj-Napoca (4.44%) showed potential performance below the national average.

In the future, the dynamic in the Romanian rental market is likely to remain affected by persistent constraints in new supply, as well as affordability of homeownership. The local experts also point out a new generation of consumers active in the market, driving a shift in preferences for rental properties. "The potential of the build-to-rent concept can not be overlooked either, especially in the large regional centers, but also in some secondary cities that have been developing rapidly in recent years. Generation Z can support the rise of this concept through their mindset and values. They are a generation more willing to embrace change," said Andreea Popa, Senior Consultant at Imobiliare.ro.

Mortgage Market:

Lending Activity Picks Up, Expected to Keep Growing in 2025

While an EU member since 2007, Romania has yet to adopt the Euro, and interest rates on loans in the country are primarily affected by the monetary policy of the National Bank of Romania (NBR). After a 25 b.p. cut in August 2024, the central bank has maintained its policy rate at 6.50%. At the most recent policy meeting in January 2025, the regulator re-confirmed the stance, citing a higher-than-expected inflation track and an elevated assessment of uncertainties and risks.

At the same time, the benchmark consumer credit reference index (IRCC), based on interbank transactions and used to calculate variable interest rates on RON-denominated loans with a delay of one quarter, decreased from 5.99% applied in Q4 2024 to 5.66% applied in Q1 2025, with further reductions expected.

"The value of the IRCC index applied in the first quarter will be 5.66%, and in the second quarter - 5.55%. We still do not know how much it will be in the third and fourth quarters. However, if inflation continues to decline, the NBR will revise its monetary policy interest rate. We should, therefore, witness a downward evolution of market interest rates as well. However, we must be aware that the results of the presidential elections in the spring will also have a significant impact on interest rates," said Ion Soltinschi, consultant and financial planner, quoted by Adevărul newspaper.

Data Source: NBR.

The average interest rates on housing loans in Romania have been on a gradual downward trajectory throughout 2024, according to the NBR reporting. In November 2024, the average interest rate on new RON-denominated housing loans (making up the vast majority of new lending in recent years) reached 6.14%, down from 6.90% during the same time a year prior but still elevated compared to pre-2022 levels. For EUR-denominated housing loans, the average interest rate was reported at 7.01%, only marginally down from 7.03% in November 2023.

When it comes to outstanding housing loans, while trending downward, average interest rates also remain above the pre-2022 baseline for the moment. For RON-denominated loans, the indicator was reported at 7.16% in November 2024, down from 7.88% a year prior. For EUR-denominated loans, it stood at 7.23%, also down from 7.88% in November 2023.

Average interest rates on RON-denominated loans to households for house purchase:

In terms of new loans granted, based on the NBR figures, the Romanian mortgage market recorded a 59.6% year-on-year increase in the value of new business (including pure new loans, as well as refinancing and restructuring), which reached RON 49.9 billion (USD 10.9 billion) for RON-denominated loans in 2024. The share of housing loans in total credit extended to households decreased marginally from 50.8% in 2023 to 50.6% in 2024 but is still significantly higher than the 35.7% observed five years ago in 2019. At the same time, the total value of EUR-denominated housing loans granted in 2024 dropped by 38.1% year-on-year, amounting to EUR 59.1 million (USD 63.9 million).

"The mortgage market has returned to an upward trend since mid-year, and we estimate that 2025 will bring an acceleration in the growth of the number of mortgage loans granted. <...> The mortgage market will continue to develop rapidly in the coming years, especially in the large regional centers in the country, such as Timişoara, Cluj-Napoca, Braşov, or Iaşi, but also in medium-sized cities," Alexandru Rădulescu, managing partner at SVN Romania, was quoted commenting on the developments.

Data Source: NBR.

The government's Noua Casă (New Home) Program (previously called Prima Casă or First Home) benefiting first-time buyers is expected to continue in 2025, and while the specific conditions for the program this year have not been announced yet, the experts believe they are not likely to change from the previous year. As of 2024, the program offered the following key conditions:

• RON-denominated loans of up to EUR 66,500 with a 5% downpayment (for homes priced up to EUR 70,000) or up to EUR 119,000 with a 15% downpayment (for homes priced up to EUR 140,000);
• Government guarantee of up to 60% of the loan amount;
• Variable interest rate calculated as IRCC + fixed margin of 2%.

In large part due to Prima Casă (launched in 2009) and, consequently, Noua Casă (from 2020) programs offering only RON-denominated loans, the overall composition of the mortgage stock in Romania has shifted significantly towards the national currency over the last decade. Based on the NBR data, in 2024, RON-denominated loans made up 88.8% of the stock compared to 21.2% in 2014.

As of the end of 2024, the total value of outstanding housing loans in the country reached RON 110.2 billion (USD 24 billion), a 4.2% year-on-year increase. The relative size of the market, at the same time, remains limited. Compared to the national economy, it is estimated at just 6.2% of the GDP at current prices in 2024, down from 8.4% in 2021.

Data Source: NBR.

Socio-Economic Context:

Slowdown Projected to Reverse, Political Uncertainty Continues

In 2024, Romania's economy continued to decelerate as industrial production, residential construction, IT, and transport services lost momentum due to sluggish external demand from the main trading partners, a rapid increase in wages, and high energy prices. The real GDP growth for the year is estimated at 1.9%, following 2.1% in 2023 and 4.1% in 2022.

In the next periods, however, resilient private consumption, coupled with a gradual pick-up in exports, further easing of financial conditions, and acceleration of investment (including EU-funded investment in public infrastructure) are expected to lift up growth. The European Commission forecasts a 2.5% growth in 2025 and 2.9% in 2026. The International Monetary Fund (IMF) projections currently see even stronger growth of 3.3% and 3.7% in the next two years, respectively.

Consumer Price Index (CPI) inflation in the country dropped from 13.8% in 2022 to 10.4% in 2023 and 5.3% in 2024. The most recent reporting from the INS shows the indicator at 5.1% in December 2024. The IMF forecast expects inflation in Romania to further slow to 3.6% in 2025 and 3.3% in 2026, which is in line with the European Commission's forecast of the respective 3.9% and 3.6%.

Data Source: IMF.

According to the European Commission's assessment, labor market pressures in Romania have eased, reflecting slowing economic activity and a growing inflow of foreign workers. At the same time, labor demand remains resilient, and the unemployment rate is expected to decline marginally over the forecast horizon. The most recent figures from the INS show the countrywide ILO unemployment rate at 5.6% in Q3 2024. The gap between unemployment in urban (3.4%) and rural (8.2%) areas remains significant.

Nominal wages in both the public and private sectors continued growing strongly in 2024, however, wage moderation is expected to take hold in the next two years, given the already high increases in the minimum wage, lower inflation, and abating labor market tightness.

Data Source: INS.

In general, the country's economy withstood significant adverse shocks in the wake of the conflict in Ukraine and the ensuing energy crisis. The recovery is ongoing at the background of significant polarization of the Romanian society, divided between pro-European and anti-EU political forces.

In December 2024, while affirming its 'BBB-' standing, Fitch Ratings revised Romania's outlook from stable to negative, pointing out, among other issues, that current political uncertainty negatively affects the country's fiscal prospects.

Earlier that month, the presidential election process was annulled by the Constitutional Court after the surprise first-round victory of the far-right independent candidate Calin Georgescu due to alleged foreign interference. The re-run of the election is currently set for May 2025, and its results are expected to determine Romania's development path in the near future.

Sources:

1. National Institute of Statistics (INS)
   1. Residential Construction, Q3 2024 (Preliminary Data) (RO): https://insse.ro/
   2. Building Permits Issued, December 2024 (RO): https://insse.ro/
   3. Annual GDP Release (RO): https://insse.ro/
   4. Inflation and the Evolution of Consumer Prices: December 2024: https://insse.ro/
   5. Employment and Unemployment, Q3 2024: https://insse.ro/
2. National Bank of Romania (NBR)
   1. Monthly Bulletins: https://www.bnro.ro/
   2. Loans to Households: https://www.bnro.ro/
   3. Monetary Policy: https://www.bnro.ro/
   4. NBR Board Decisions on Monetary Policy: https://www.bnro.ro/
   5. Benchmark Index for Loans Granted to Consumers: https://www.bnro.ro/
   6. Exchange Rates: https://www.bnro.ro/
3. Ministry of Finance
   1. Budget Execution Information (RO): https://mfinante.gov.ro/
4. National Agency for Cadastre and Land Registration (ANCPI)
   1. Statistics (RO): https://www.ancpi.ro/
5. European Comission
   1. Housing Price Statistics - House Price Index: https://ec.europa.eu/
   2. Economic Forecast for Romania: https://economy-finance.ec.europa.eu/
6. International Monetary Fund (IMF)
   1. Country Overview: Romania: https://www.imf.org/
7. Organization for Economic Co-operation and Development (OECD)
   1. Romania Economic Snapshot: https://www.oecd.org/
8. Fitch Ratings
   1. Fitch Revises Romania's Outlook to Negative; Affirms at 'BBB-': https://www.fitchratings.com/
9. National Credit Guarantee Fund for Small and Medium Enterprises (FNGCIMM)
   1. Noua Casa (RO): https://www.fngcimm.ro/
10. SVN Romania
    1. History of Mortgage Credit in Romania (RO): https://www.svn.ro/
    2. Romania Market Drive 2024: https://www.svn.ro/
11. Imobiliare.ro
    1. Imobiliare.ro Index (RO): https://www.imobiliare.ro/
    2. Residential Real Estate Market, Q3 2024 (RO): https://market360.imobiliare.ro/
    3. Real Estate Market Evolution In 2024. What To Expect In 2025? (RO): https://hub.imobiliare.ro/
12. Storia
    1. Rental Market Report 2024 (RO): https://rezumat.storia.ro/
13. BBC
    1. Romania's Canceled Presidential Election and Why it Matters: https://www.bbc.com/
14. Politico
    1. Romania Sets New Election Date, but Risks Same Result: https://www.politico.eu/
15. Adevarul
    1. Prospects for the Mortgage Market. How much Will Bank Rates Decrease (RO): https://adevarul.ro/
    2. A Look Back at 2024 for Real Estate and What Experts Predict for 2025 (RO): https://adevarul.ro/
16. Libertatea
    1. New Home Program 2025 (RO): https://www.libertatea.ro/
17. Ziarul Financiar
    1. SVN Credit: Bucharest and Ilfov County Hold 39% of Total Mortgages Issued in 2024 (RO): https://www.zf.ro/
    2. SVN Report: The Number of Homes Sold in 2024 Increased… (RO): https://www.zf.ro/  
18. Romania Libera
    1. Rents Increased by 15% in 2024…(RO): https://romanialibera.ro/
19. The Diplomat Bucharest
    1. Colliers Predictions: Economic Growth of Just Over 2 Percent in 2025, House Prices May Rise in the Near Future (RO): https://www.thediplomat.ro/