In Bucharest and its metropolitan area, new residential deliveries were down 3% to 21,328 units in 2022. Decreases were also seen in the West region, where deliveries fell by 11%, and in the North-East region, where 5% fewer homes were built than the previous year.

Meanwhile, a bigger volume of deliveries was recorded in Constanța and the coastal area, especially Năvodari - Mamaia Nord, but also in the metropolitan area of Cluj.

"Clearly, supply is adjusting in response to falling demand, and the market is moving towards a new equilibrium after the last two years of record highs. Further, falling demand, rising interest rates, inflation that reduces purchasing power, and rising construction costs add to the uncertainties affecting the short-term residential market outlook,” said Gabriel Blăniță, Associate Director Valuation & Advisory Services at Colliers Romania.

Speaking about market trends, he added that in the next 2 years, for every house in the city, 3 houses in the metropolitan area will be delivered.

In terms of demand, apartment sales started to decrease from the middle of 2022 in the largest cities in the country with up to 20-30%, while in Bucharest there was a slight growth.

“The persistence of inflation for a longer period than initially estimated makes this year much more difficult for those who want to buy a home with a loan,” adds the representative of Colliers Romania.

Banks are also experiencing lower numbers of customers who can afford the cost of mortgage loans, and since the first quarter of this year, the drop has been considerable, with 28% fewer mortgages being granted nationally. This decrease in the first three months of 2023 led to a decline in the balance of mortgage loans in Romania. Going forward, the agency expects interest rates to record a significant drop starting with the first half of 2024.