Romanians are buying more and more houses for rental income. More than 3,000 new homes have been bought for investment purposes in the last three and a half years / Rents have decreased

imobiliar, locuinta, casa Sursa foto: Pexels/Photomix Company

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 subsequently offered for rent, reveals an analysis by a real estate consultancy company SVN Romania.

According to the source cited, the current occupancy rate of these dwellings is over 90%, with over 2,700 units being rented out to tenants on a medium to long term basis (over six months). At the same time, more than 55,000 new homes have been handed over in Bucharest and its surroundings since 2018. Of these, about 45% have been resold, with the remainder being offered for rent for a long-term return.

“While the residential market has weathered the shock of the Covid-19 pandemic very well, the rental sector has been hard hit, especially in the segments for students and business and tourist travelers. The long-term rental segment has performed better, especially in big cities such as Bucharest, with the general climate improving compared to a year ago”, says Gabriel Voicu, Vice President SVN Romania.

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On average, rents in the new residential segment in Bucharest decreased by around 6% in the first half of 2021 compared to the same period in 2020.

“For the next 12 months, a linear evolution is estimated, taking into account both the results recorded by the local economy and the degree of immunization as well as the return of employees to office buildings, even in a hybrid work system, and the start of the academic year,” the release states.

Real estate consultants claim that, on average, a new two-bedroom apartment located in Bucharest rents for 250 to 350 euros in the mass market segment, 450 to 600 euros in the middle market segment, a new three-bedroom apartment closes at between 600 and 900 euros in the middle market segment, while a villa can be rented from 750 euros on average.

According to the report, falling rents, the inflection of some landlords, especially in the immediate aftermath of the State of Emergency in spring 2020, and declining occupancy have led to a reduction in yields to an average of around 5.3% in euros per year, equivalent to the payback of the investment over a period of almost 19 years, without taking into account the increase in the value of the property purchased.

“In the future we will see more and more owners of large apartment portfolios, buying homes with a view to renting them out at a later date offering a satisfactory and stable return over the long term, regardless of certain one-off periods. Buyers active in this segment need to pay particular attention to the type of property purchased; just as the demand for house purchases has changed, those looking for a home to rent have new selection criteria, from surface areas to subdivisions”, concludes Gabriel Voicu.

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