Authorizations of new residential developments in Bucharest were down in the first semester by one third compared with the same period of 2021 but hit a 14-year record with a permitted volume of 350,000 sqm in July alone, shows data from Colliers Romania.
The growth in Q3 offsets the decrease from the first semester, so that in the first nine months there are only 1% fewer authorized units compared to the same period last year.
“The number of units delivered today depends on the number of building projects already started and on past demand for housing, while authorizations depend on the current demand for housing, on the confidence in the future, and to a large extent on the administrative process. Thus, this year we still expect record deliveries, even if demand has been on a downward trend since March," explains Gabriel Blăniță, Associate Director Valuation & Advisory Services at Colliers Romania. The authorized surface of 350,000 sqm can accommodate almost 7,000 apartments in Bucharest.
In Ilfov, in the first nine months of the year, the authorized area decreased by 6% compared to the same period last year. Cluj recorded a 4% increase in the authorized area, in Iași there was a 3% increase, and in Timișoara the authorized areas decreased by 5% during this period.
“Although the authorization context has improved significantly compared to the first part of the year, we expect the rate of deliveries in the coming year to slow down amidst falling demand, plus construction costs also remain high, contributing to additional caution on the part of developers. However, the substantial pipeline of projects authorized makes a supply shock very unlikely in the coming period,” said Blăniță.
Residential construction was up 5% in the first three quarters, while costs soared by more than 30% in the same period, according to Colliers Romania data.
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