House prices were down slightly by 0.26% y-o-y in Q3 2022
Romania’s housing market is slowing dramatically, amidst slowing demand. The average selling price of apartments in Romania fell slightly by 0.26% in Q3 2022 from a year earlier, in sharp contrast to a year-on-year growth of 9.82% in Q3 2021. Though in nominal terms, house prices are still rising strongly by 13.14% over the same period, driven by high inflation.
On a quarterly basis, Romanian real house prices dropped 4.06% during the latest quarter.
Real house prices increased by more than 40% from 2015 to 2021, which is equivalent to an average growth of 6.7% annually. Romania’s strong performance in recent years (with an exception of 2020 where real prices rose by less than 1%) is a rebound from previous dramatic falls. From 2007 to 2014, house prices plunged by almost 70%. It was only in 2015 that the housing market began to recover.
Demand slowing gradually; residential construction recovering
In September 2022, the total number of properties subject to sales-purchase contracts nationwide fell slightly from a year ago, to 62,054 units, following annual growth of 15.6% during 2021 and 11.6% in 2020, according to the National Agency for Cadastre and Land Registration (NACLR).
Residential construction is rising strongly again. In 2021, the total number of residential building permits in Romania surged 24.1% y-o-y to 51,287, following a 2.9% decline in 2020, according to the National Institute of Statistics (INS). Likewise, the area of residential building permits issued increased 15.3% y-o-y to 12.09 million sq. m. over the same period, after falling by 4.4% last year.
Rents, rental yields: good yields in Bucharest at 5.83%
|Romania: city centre apartment, buying price, monthly rent (2-BR apartments)|
|Buying price||Rate per month||Yield|
|Bucharest||€ 83,250 - € 351,800||€ 400 - € 1,800||5.83%|
Recent news: Romania’s economy expanded by 4% in Q3 2022 from a year earlier, its sixth consecutive quarter of year-on-year growth, mainly driven by robust household consumption and fixed investment, according to the INS. During 2021, the economy grew by 5.9%, a strong rebound from a 3.7% contraction in 2020.
The European Commission expects the Romanian economy to grow strongly by 5.8% this year before slowing to 1.8% next year.