The Romanian residential market is navigating through many changes. This means that developers need to be flexible in order to adapt to all changes, as the speakers of the residential panel of SEE Property Forum 2024 concluded.
The changes reflect what is happening today. A study conducted by imobiliare.ro showed that in the second trimester of 2024, the total number of houses for sale was 17% lower than the number of sales in the second trimester of 2023. For new apartments or houses, the decrease was even higher, at 26%, explained Cristina Dumitrache, Chief Business Development Officer at Rustler Romania. “But if we look at the demand, we see that the requests were 25% higher than in 2023, and especially for new houses and apartments,” said Cristina Dumitrache, showing that the pressure on new buildings is a challenge all developers need to face.
“The biggest challenge today, for us, is the impossibility of getting the permits for a new building,” said Andreea Dumitru, Chief Marketing Officer at Hagag Development Europe. As the company focuses on Bucharest, where permitting is a huge problem, Andreea Dumitru showed that instead of focusing on the challenges that are coming with the activity, like planning and constructing the building, or delivering on time, they focus on permitting because they don’t have a green light to start the projects.
A challenge is also finding construction teams that have the ability, experience and knowledge to apply the things demanded by the developer when constructing a building, not only the permitting. Leonidas Anastasopoulos, Managing Partner at Alesonor explained that the permitting situation is pretty much the same in all major cities in Europe, with years passing before getting a permit for a construction project.
The purchasing power of customers increased in the last year and the fact that there are just a few new buildings is putting pressure on prices. “I don’t think there will be a change in trends in the coming years in the market and the investors will probably start to buy more directly from developers,” said Costin Nistor, Managing Director, Fortim Trusted Advisors. As he also explained, the prices will not go down as the demand remains strong.
In the first 9 months of 2024, Hils Development sold 30% more apartments compared to 2023 and the average price is 12% higher this year. This is a trend that will continue next as there will be a shortage of supply in new housing, explained Bogdan Balasa, General Director at Hills Development. The sustainability requirements will put pressure on building costs, increasing the costs by at least 10%. In the next 2-3 years we will see a double-digit increase in the prices of new houses every year.
“Our latest addition to our portfolio in Romania is AFI Home, residential units designed for rent,” said Luciana Giurea, Head of Residential Division at AFI Europe Romania. This is the first residential project the company has in Romania, but in the Czech Republic and in Poland, AFI is already operating over 4,000 units and has thousands under development. Romania is closely following the trends we see in other countries. “About 20% of the units bought in the whole market in Romania are coming back to the market for rent, so it was just normal to follow this trend of building for rent,” showed Luciana Giurea.
Finding tenants is not an easy thing, but technology can help, and that is what the platform developed by Rentguard is doing. “In the short term, the platform offers a digital solution to owners and tenants, but in the long term it will create a competitive market where every single person is connected with the other one and has references from the best contractors,” explained Eduard Ancuta, Founder & CEO of Rentguard.ro.
