Chaos in the residential market. Asking prices and rents go down or up from month to month, depending on the situation in the country

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Prices in the Bucharest residential market seem to move chaotically, depending on various stimuli, from pandemics to increased salaries (especially for the public-sector employees), but also on the supply-demand ratio. Thus, according to the real estate portal anunț, the average prices of houses and villas in Bucharest and its surroundings have been falling continuously since May 2021, even though they were said, after the lockdown, to be sought after by buyers. The still high prices, but also the dissipation of fears of a new lockdown have, however, reduced demand.

On rents, houses and villas lost ground again after last month’s boom when they rose by more than 33%. In July, however, average asking rents for houses and villas in Bucharest fell 19% to €1,656/month.

The downward trend is also evident for 4-room apartments, both for purchase and rental. Thus, the average price of a 4-bedroom apartment in Bucharest fell by 2.24% in July, to around €156,000. At the same time, average asking rents fell aggressively by more than 10%, a sign that demand has fallen. The average rent for a 4-bedroom apartment is now €825/month.

For 3-room apartments in Bucharest, the situation is a bit strange. Although average sales prices have risen by almost 1% to more than €100,000, the opposite is true for rents. For 3-bedroom apartments in Bucharest, average rents in July were €495/month, down by 1% after a rise of more than 5% in June.

On average, the asking price for 2-room apartments in Bucharest stagnated in July, at almost €70,000. At the same time, asking rents rose by an average of 3.88% to €375/month.

Finally, for studio flats, both average sales prices and average rents are showing the most linear trend of all housing types on the market. Thus, average sales prices increased by only 1.8% to €47,000, while average rents demanded by landlords increased slightly, by less than 1%, to €245/month.

Interestingly, more than 3,000 new homes completed in Bucharest and its surroundings in the last three and a half years have been purchased for investment purposes and offered for rent, according to an analysis by real estate consultancy SVN Romania.

The current occupancy rate of these dwellings is over 90%, with over 2,700 units being rented to tenants on a medium to long term basis, i.e. for periods of at least six months. In total, more than 55,000 dwellings have been completed in Bucharest and its surroundings from 2018 to date, according to statistics from the National Institute of Statistics and SVN Romania estimates.

More than 5,500 dwellings have been purchased by investors, representing about 10% of the total deliveries. Of these, about 45% were resold, with the remainder being offered for rent for long-term returns.

Edited for English by: Service for Life SRL

Sursa foto: Inquam Photos / Octav Ganea

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