Romania has one of the smallest private rental sectors (PRS) in Central and Eastern Europe (CEE), and the domestic market counts a little over 1,000 residential units in construction or planned, according to a report by Colliers in collaboration with Greenberg Traurig and Kinstellar.
In CEE countries, overcrowding of homes is above the European Union (EU) average and prices of homes are soaring, so more people could turn to the rental market.
“As demographics are changing and with prices steadily rising for development in congested areas with opportunities becoming scarcer, and many people being priced out of the market for home purchase, we expect this asset class to take hold in CEE,” says Victor Constantinescu, Managing Partner of law firm Kinstellar Bucharest, Co-head of Firm-Wide Real Estate sector.
The Colliers reports points out that the PRS is one of the most sought-after property types by investors across Europe. This is the second most invested asset class in Europe, with industrial and logistics coming a close third, according to Real Capital Analytics (RCA).
The Czech Republic is leading the PRS market in the region with a stock of over 50,000 units, while Poland has 5,000 residential units and another 10,000 planned or under development. By comparison, Romania has around 320 private residential units operational at present.
In Bucharest, an indicative mortgage payment for a 45 sqm apartment stands at €420, while the monthly rental payment could reach €470. This are the second lowest costs in the region, just ahead of Sofia. Meanwhile, Prague has the highest mortgage and rent costs of €780 and €550, respectively.
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