In Romania’s major cities, residential prices have increased by between 60% and 90% over the past six years, making genuinely affordable apartments increasingly difficult to find in central and semi-central areas. In Iași, prices have risen by 80%, in Timișoara by 90%, while Cluj leads the ranking with a 100% surge over the same period. At the same time, in Bucharest the number of building permits has fallen by 45% in the last three years, limiting the supply of new homes. According to Colliers consultants, this combination - rising prices and a shrinking pipeline of new projects - is widening the gap between well-located new developments and the rest of the market, in a context where high interest rates and declining purchasing power weigh increasingly heavily on buyers’ decisions.
“The Bucharest residential market appears affordable if we look at the average, but that average conceals a much more polarised reality. In central and semi-central areas, we can no longer speak of <affordable housing> in the classic sense. The gap between what people want and what they can afford has never been wider”, explains Gabriel Blanita, Associate Director | Valuation & Advisory Services, Colliers Romania.
Colliers consultants warn that the increasingly slow pace of project approvals limits developers’ ability to meet future waves of demand, particularly in the new-build segment, where construction costs remain high. In Bucharest, the number of building permits is down 45% over the past three years compared with the previous period, against a backdrop of administrative gridlock and a slowdown in urban development. Whereas such adjustments were temporary in previous cycles, current trends point to growing structural pressure on supply.
“In Bucharest we have 45% fewer building permits than in previous years. This is not simply a temporary bottleneck, but the premise for a new phase of accelerated price growth once interest rates start to fall, real wages return to positive territory, and demand picks up far more quickly than supply can respond”, adds Gabriel Blanita.
In terms of transaction activity, demand remains solid despite more restrictive access to mortgage lending. Nationally, transaction volumes are only around 10% below last year’s levels, while Cluj - one of the most dynamic markets in the country - is even reporting a 6% increase. High financing costs and constantly rising prices are prompting many potential buyers to postpone their purchase and turn temporarily to renting, a segment that is expanding, especially in university cities where mobility and seasonal demand are high. This shift in demand, in line with trends observed in other European markets, is intensifying competition in the rental sector, where price dynamics may become more visible in the coming months.
If interest rates start to decline and real wages return to growth, the market could enter a new phase of rapid expansion in 2026 - 2027, fuelled by the demand accumulated over recent years and by the increasingly limited supply. Unlike previous cycles, the current evolution is unfolding against a complicated public backdrop marked by administrative blockages, fiscal uncertainty and delays in updating urban planning instruments - factors that can amplify price pressures and further slow the supply response.
Although the market is going through an adjustment phase driven by the impact of fiscal measures aimed at reducing the budget deficit, Colliers consultants emphasise that there are no signs at present of a crisis similar to that of 2009 - 2010. Current market movements appear instead to be a natural stage of recalibration in a market where demand remains strong, sustained by the overcrowding of major cities, the housing deficit and stable demographic fundamentals.
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