Real Estate: Housing prices in large Romanian cities up between 60 and 100pct in the past six years

Housing prices have increased by 60%-90% in the past six years in major cities in Romania, making truly affordable apartments increasingly difficult to find in central and semi-central areas, according to real estate adviser Colliers Romania."Thus, in Iasi, the increase was 80%, in Timisoara, 90%, while Cluj-Napoca leads the growth chart with a 100% jump in the same reference interval. At the same time, in Bucharest, the number of building permits has decreased by 45% in the past three years, limiting the supply of new housing. This combination - rising prices and fewer projects - amplifies the difference between new, well-positioned housing and the rest of the market, in a context in which high interest rates and declining purchasing power increasingly weigh on the purchase decision," the company's consultants explained in a press release .In Bucharest, the number of building permits has decreased by 45% in the past three years compared to the previous period, amid administrative blockages and the slowdown in urban development. If in past cycles such adjustments were temporary, the current development indicates an increasingly strong structural pressure on the supply, they argue."In Bucharest, we have 45% fewer building permits than in previous years. We are not just talking about a temporary blockage, but about the premise of a new accelerated price increase once interest rates start to fall, real wages will return to positive territory, and demand will advance much faster than supply can respond," Gabriel Blanita, associate director Valuation&Advisory Services with Colliers Romania, emphasised in the press release.According to real estate consultants, high financing costs and the continuous increase in prices are causing many potential buyers to postpone the purchase and temporarily turn to renting, a segment that is expanding, especially in university cities, where mobility and seasonal demand are high."Even though it is going through a period of adjustment led by the impact of fiscal measures to reduce the budget deficit, Colliers consultants emphasise that the market is not currently showing signs of a crisis similar to that of 2009-2010. The current developments seem rather a natural stage of resettlement in a market where demand remains strong, supported by the overcrowding of large cities, the housing shortage and stable demographic fundamentals," the press release also states.