Real Estate in Romania : Market Analysis 2013 and Forecast 2014-2015
The real estate market in Romania had a slight increase in 2013 and the trend for the years 2014 and 2015 seems to remain stable. An increase in property prices is expected in the following years, determined by the purchases of foreign investors attracted by the market price of the Romanian real estate, which, along with the real estate market in Bulgaria is the one of the most competitive in the European Union.
In 2013, a slight increase in demand for the real estate market took place in a better macro-economic background than anticipated. Romanian real estate market won't show major changes during 2014 recording results slightly higher compared to 2013. Forecasts for the next two years are still encouraging, with an estimated 1 growth 9% in 2014 and 2.5% in 2015.
Real Estate in Romania : Trends in sales of residential
Property values in Romania continued to decline in 2013, but at a slower pace than in previous years.
Land prices
The price of land across the country fell by 63 % on average compared to 2008, 6% in the last 12 months.
However, for agricultural land, rising prices over the last two years is about 50%.
The market for old apartments
If in the last 5 years the prices of old apartments fell by 41% (with price cuts of nearly 25% per year at the beginning of the crisis), prices have however decreased by 2% per year last.
First place in the ranking of the highest prices for old apartments is still occupied by the capital, Bucharest, with an average of 1,000 euros per square meter, followed closely by the city of Cluj- Napoca with 960 euros per square meter, Timisoara is the third 900 euros per square meter.
Compared to the beginning of the crisis, prices of old apartments in Bucharest have decreased by approximately 63% (decrease in 2013 is about half a percentage point).
As for the small towns, the most expensive apartments were sold in Buzau and Suceava North East of Romania, while the cheapest were sold in Resita, southern Romania, for 440 euros per square meter .
For the second half of 2013, the average price per square meter for small towns is 580 euros, a decrease of approximately 39% compared to 2008.
The market for new apartments
Prices for new apartments across the country have experienced lighter than the old apartments decline since the beginning of the crisis, the decrease is about 35%. Over the past 12 months, the decline was only 1.2%. The average price at the national level in the first half of 2013 was 780 euros per square meter.
The capital is also the most expensive city for new apartments - average price of about 1,140 euros per square meter (the only city or prices exceed 1000 euros per square meter) - down about 44% compared to the beginning of the crisis.
The market houses and villas
On houses and villas, the most expensive properties were sold in Bucharest, at an average price of 1,040 euros per square meter, then in Cluj-Napoca for an average price of 890 euros per square meter. Followed by the cities of Alexandria (south) and Botosani (North) .
The trend for the residential sector is rather lightly lower prices for the years 2014 and 2015. This phenomenon is likely to continue over time and then stabilized.
Real Estate in Romania: Trends rental of office space sector
The office property market is by far the most attractive segment of the real estate market for the years 2014 and 2015 as the industry of renting office space has grown considerably thanks to business development of ICT (Information Technology and communication) in Romania.
Total real estate transactions recorded during the year 2013 saw a slight recovery.
To rent office space in business centers including the city of Bucharest remains the most popular last year with 292,000 square feet of space leased at an average price of 12 Euro/m2 offices, followed by Cluj-Napoca with 10,000m² of rented at an average price of 9 Euro/m2 offices.
| Population | Average gross wage | Unemployment rate | Space rented offices in 2013 | Average price m2/month | |
| Bucarest | 1 942 000 | 700 Euro | 2,00% | 292.000 | 8 -17 Euro |
| Cluj | 307 136 | 400 Euro | 3.5 % | 10.000 | 4 -14 Euro |
| Brasov | 276 354 | 360 Euro | 4.5 % | 200 | 2 - 12 Euro |
| Sibiu | 147 245 | 480 Euro | 3.86% | 4400 | 3 - 10 Euro |
| Timisoara | 306 854 | 400 Euro | 1.9 % | 4000 | 2 - 14 Euro |
| Iasi | 304 043 | 350 Euro | 6,00% | 5.000 | 5 - 19 Euro |
| TOTAL | 3 283 632 | / | / | 315.600 | / |
| City average | / | 500 | 3.63% | 52 464 |
4 - 14 Euro 9.5€ m2/month |
In 2013, rents have remained relatively stable (+/- 10%) or average in Bucharest 12.5 Euro per square meter per month. But this average may vary by geographical area, the proposed space, the vacancy period, the available space in similar buildings, etc...
The following table shows the change in price per square meter of offices for rent depending on their location in Bucharest but also in terms of the quality of the property represented by the class A (highest quality offices), class B or class C (offices less qualitative).
|
|
Class A |
Class B |
Class C |
Villas |
|
Downtown |
15-16 eur / m2 |
12-14 eur / m2 |
10-12 eur / m2 |
11-13 eur / m2 |
|
Downtown North |
16-17 eur / m2 |
12-14 eur / m2 |
10-12 eur / m2 |
11-12 eur /m2 |
|
North (Baneasa, Pipera, Tunari) |
10-12 eur / m2 |
8- 9 eur / m2 |
7- 8 eur / m2 |
7-9 eur / m2 |
|
West |
14-16 eur / m2 |
11-12 eur / m2 |
8-10 eur / m2 |
9-11 eur / m2 |
|
South |
10-11 eur / m2 |
9-10 eur / m2 |
7-8 eur / m2 |
7-9 eur / m2 |
|
East |
10-13 eur / m2 |
9-10 eur / m2 |
7-8 eur / m2 |
8-11 eur / m2 |
Commercial space sector
On the commercial space sector, the current rental prices practiced in the capital recorded a sharp drop compared to 2008 where the price per square meter was euros/m2 100-115. Indeed, in 2010, the price dropped to 65-80 m2 EUR/m2/month. In 2013, the monthly rent of commercial space stood at 40-60 euros per square meter a decrease of over 50% compared to 2008.
A very large variation in price per square meter is visible also within the capital with commercial spaces in side streets where the price per square meter is about 20 € while commercial spaces on the boulevards of the capital as Boulevard Magheru be rented for 60€ per square meter. For example, an area of 20 square meters on the ground floor on this boulevard is available for a 1,200 €/month rent.
In Timisoara, located to the west of the country, prices for rentals of commercial spaces are highest after Bucharest. The price charged for the rental of commercial space is 18-20 Euro per square meter. An area of 20 square meters in the heart of the city rent 400 €/month.
In Brasov, in the center of the country, prices are between 15 and 17 Euros per square meter. An area of 20 square meters in Brasov leases approximately 350 €/month.
In Cluj -Napoca, a shop of 20 square meters located on the Boulevard de la République is rented 250 €/month or about 12€ per square meter.
A Constanta city beach south of the country, the price of renting commercial space is about 6-9 Euro per square meter is 20m2 for a monthly rent of 180€.
In 2014, the outlook for this sector rather turn to a stability of rents which would remain essentially the same in 2013 is between 40 and 60 euros per square meter for the city of Bucharest.
