Banks in Romania are actively looking to accelerate new residential lending in Romania as the central bank is expected to lower interest rates in H2 2024. Lenders have initiated a series of offers with more favourable interest rates, below the 7% monetary policy rate set by the National Bank of Romania (NBR), according to Vlad Săftoiu, Head of Research at Cushman & Wakefield Echinox.
“We are currently noticing offers in the market with annual fixed interest rates ranging between 5.6 - 5.85% for a period of 3 - 5 years, a level similar to those currently registered in Western Europe and which, combined with the higher housing affordability in Bucharest compared with most major European cities, will create an extremely favourable framework for further developments of large-scale residential projects in the capital city, as well as for price increases on the medium and long terms,” said Săftoiu.
At the same time, Bucharest is among the most affordable residential markets in Europe, with 96.2 average wages needed to purchase a 70 sqm apartment. Furthermore, the capital city of Romania also offers attractive residential prices at CEE level, with lower affordability rates being registered in Prague (the average asking prices exceed €4,700/ sqm and 196.7 average net salaries are needed), Bratislava (171.5 salaries), Warsaw (165.3), Belgrade (161). At the end of February 2024, the average asking price for a listed apartment in Bucharest was €1,663 per sqm, up by 6.6% year-on-year.
