House prices were up by a minuscule 0.45% y-o-y in Q3 2020

The average selling price of apartments in Romania increased by a meagre 0.45% in Q3 2020 from a year earlier, following y-o-y rises of 7.3% in Q2, 9.51% in Q1, and 4.02% in Q4 2019. On a quarterly basis, Romanian real house prices fell by 1.95% in Q3 2020.

House price growth averaged 8.7% annually from 2015 to 2017 before slowing to 3.3% in 2018 and 4% in 2019. 

Romania’s strong performance over the past five years is a rebound from previous dramatic falls. House prices plunged by 24.22% in 2009, 22.08% in 2010, 6.99% in 2011, 5.96% in 2012, 10.43% in 2013, and 1.59% in 2014. It was only in 2015 that the housing market began to recover. 

Demand remains weak, construction activity steady

In Q3 2020, the total number of properties sold nationwide increased slightly by 0.8% y-o-y to 142,483 units, according to the National Agency for Cadastre and Land Registration. On the other hand figures from the real estate intelligence platform Analize Imobiliare showed that the demand for residential dwellings in Romania’s six biggest cities increased 14% to about 154,500 units in Q3 2020 from the previous quarter, but still down by 12% from a year earlier, according to. 

Residential construction was almost steady. During 2019, the total number of residential building permits in Romania fell slightly by 0.4% to 42,541 units from a year earlier, according to the National Institute of Statistics (INS). In contrast, the area of residential building permits issued increased 2.7% y-o-y to 10.97 million sq. m. last year.

Rents, rental yields: good yields at 6.07%

Bucharest apartment costs are low, at around €1,591 per sq. m.

Romania: typical city centre apartment buying price, monthly rent (120 sq. m)
  Buying price Rate per month Yield
Bucharest € 190,920 € 966 6.07%

Recent news: Romania’s economy continues to struggle with GDP declining by 6% in Q3 2020 from a year earlier, following a 10.3% contraction in Q2, according to the National Institute of Statistics (INS). Though on a quarterly basis, economic activity grew by 5.6% in Q3, in contrast to Q2’s 12.2% fall and the biggest q-o-q growth on record. Recently, the European Commission projects that the Romanian economy will contract by 5.2% this year, following annual expansions of 4.2% in 2019, 4% in 2018, 7% in 2017, 4.8% in 2016, 3.9% in 2015 and 3.4% in 2014.