The prices of new apartments sold on the Romanian market increased by 3.1% in 2020 compared to the previous year, reaching an average of 1,322 euros / sqm. Thus, Romania is on the fourth place in the top of the 24 countries analyzed within the Deloitte Property Index 2021 report, in the ascending order of prices, after Bulgaria, Bosnia-Herzegovina and Portugal.
Regarding the degree of accessibility of housing for the inhabitants of each country, calculated according to the number of average annual gross salaries required to buy a new standard apartment (70 sqm), Romania ranks in the middle of the pack.
For the first time, Austria became in 2020 the country with the most expensive homes among those analyzed, with an average price of 4,457 euros / sqm, followed by France, with 4,421 euros / sqm. Prices of over 4,000 euros / sq m were also recorded last year in Germany, Great Britain and Israel. At the opposite pole, with the lowest prices for new homes is Bulgaria, with an average of 578 euros / sqm, followed by Bosnia-Herzegovina, with 881 euros / sqm.
The largest price increases were recorded in 2020 in Hungary, where the transaction price for new apartments rose by 12.3% compared to the previous year, the Netherlands and Germany, with an advance of 10.81% each. In total, last year, housing prices rose in 21 of the 24 countries analyzed. Decreases were recorded in the period mentioned in Norway, by almost 4%, Bosnia and Herzegovina, by 1.54%, and Italy, by 1.24%. Romania, with an annual increase of 3.1% in prices, ranks sixth in ascending order of price increases.
“Despite the uncertainty that has dominated the European economy in 2020, in most cases, the residential market has seen price increases. This development is due to the fact that most countries have reported an unprecedented demand for new housing shortly after the lifting of restrictions in the context of the pandemic, and most likely due to rising construction costs and accessibility of financing. For the second half of 2021, the majority of study participants (73%) estimate that prices will continue to rise, in a general inflationary climate “, said Alexandra Smedoiu, Deloitte Romania Partner, Leader of Real Estate Consulting Services.
The Deloitte Property Index 2021 report also analyzes 61 European cities, and Paris leads in the top of the most expensive homes, with an average price of 12,917 euro / sqm for a new apartment, followed by Tel Aviv (10,332 euro / sqm), Munich (8,700 euro / sqm) and London (7,916 euro / sqm). Three cities in Romania are included in the ranking, respectively Cluj-Napoca (1,800 euro / sqm), Bucharest (1,440 euro / sqm) and Timisoara (1,270 euro / sqm).
Paris also leads in the top of the cities with the highest rents, with 28.6 euros / sqm / month, followed by London (26.1 euros) and Oslo (24.7 euros).
In order to make the most relevant comparison of the analyzed markets, the study also calculates the degree of accessibility of housing for the inhabitants of the analyzed countries, depending on the number of average annual gross salaries needed to purchase a new standard apartment (70 sqm). A Romanian needs seven annual salaries for such an acquisition, which is an average level of accessibility. The most affordable housing is in Serbia, where 15.2 average annual gross wages are needed for one’s own housing, and the most affordable are in Portugal, Belgium and Ireland (3.1 average annual wages).
Instead, in Romania are the most expensive mortgages, with an average interest rate of 5.3% per year. At the other end of the spectrum is Portugal, where interest rates on such loans fluctuate around 1% per year.
The Deloitte Property Index study, now in its tenth edition, analyzes the evolution of the residential real estate market in 24 countries and 61 European cities during 2020.
Translated from Romanian by Service For Life S.R.L.