Deloitte study: housing in Romania continues to be among the most affordable in Europe. Cluj-Napoca is the most expensive city for both buyers and tenants

Romania ranks third in the top of the European countries with the cheapest housing, after Bosnia and Herzegovina and Greece, with an average price of 1,417 EUR/sqm for a new dwelling, up from 1,266 EUR/sqm in 2021, according to Deloitte Property Index 2023, conducted in 27 countries based on data from their main cities and towns. At the opposite end, Austria is the most expensive European country, with 4,925 EUR/sqm in 2022, followed by Germany (4,800 EUR/sqm), France (4,639 EUR/sqm) and Norway (4,204 EUR/sqm). Most of the countries saw increases in average prices for new dwellings, while drops were noted only in the United Kingdom (-18.8%), Denmark (-9.7%) and France (-0.2%).

The study also shows that an average Romanian needs 6.3 annual gross salaries to purchase a 70 sqm dwelling, which places our country sixth in the top of the best affordability, after Belgium (4.3 gross annual salaries), Norway (4.7 gross annual salaries), Denmark (5), Slovenia (5.6) and Italy (6.2). Slovakia is the least affordable among the analyzed European countries, with 14.1 gross annual salaries needed to buy a new home, followed by the Czech Republic (13.3 gross annual salaries).

“Last year was marked by uncertainty on the residential market segment, as increasing financing cost looms over long-term mortgage agreements. In terms of volumes, while there appears to be a slight decrease in demand for residential properties, again due to surging financing cost and decreasing purchasing power on account of inflation, there was a slight rise in the rental segment. Looking ahead to the next 12 months, the prices of residential dwellings are expected to stabilize, according to the study, while recent NBR data shows a revival of the mortgage lending compared to 2022, both in lei and in euros. Another notable trend for the next year is the emphasis on sustainable and energy-efficient housing, with different residential products being sought after by informed consumers,” said Alexandra Smedoiu, Tax Partner, Deloitte Romania, and Real Estate Industry Leader.

The ranking of the European cities with the most expensive housing is led by Paris, with an average price of 14,622 EUR/sqm for a new apartment, followed by Munich (11,400 EUR/sqm) and London (9,163 EUR/sqm). In Romania, the most expensive city is Cluj-Napoca, with 2,363 EUR/sqm and a 21.8% increase compared to the previous year, while Bucharest ranks second, with 1,693 EUR/sqm. This places our country among the few European states in which the most expensive city is not the capital, alongside Ireland, whose ranking is led by Cork City, Italy, where Rome is surpassed by Milan, and Spain, where Barcelona ranks first.

As far as the rental market is concerned, Dublin is the most expensive European city, based on the available data analyzed by the Deloitte study, with a monthly price level of 32.8 EUR/sqm. The second ranked is Paris, with prices at 28.5 EUR/sqm, followed by Oslo (28 EUR/sqm). At the other end of the scale, Bulgaria continues to be the country with the lowest average rental prices, with an average of 4.6 EUR/sqm for those who live in Sofia, followed by Greece, where the average monthly rent for those who live in Thessaloniki is 6.6 EUR/sqm. Romania is also among the countries with the lowest rents. The most expensive Romanian city analyzed is Cluj-Napoca, with an average monthly rent of 8.6 EUR/sqm, while Bucharest tenants pay an average of 8.1 EUR/sqm per month.

"Sustainability is an increasingly important element in any valuation process, including for housing, both for the seller and for the buyer. Driven by regulatory requirements and by numerous stakeholders, this trend has been accelerated by the significant surge in energy price and is visible across Europe, where residential developers have been compelled to look for alternative energy solutions and homeowners have been upgrading their houses with solar panels, geothermal systems or other renewable energy technologies," said Marius Vasilescu, Financial Advisory Partner, Deloitte Romania.

The 12th edition of the Deloitte Property Index study analyzes the evolution of the residential real estate market in 27 countries and 76 cities in 2022. All price statistics collected are converted into euro to provide comparable results.

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Deloitte Romania is one of the leading professional services organizations in the country providing, in cooperation with Reff & Associates | Deloitte Legal, services in audit, tax, legal, consulting, financial advisory, risk advisory, business processes as well as technology services and other related services, through over 3,000 professionals.