Deloitte study: Romania remains among the European states with the cheapest housing

Romania ranks second among European countries with the cheapest housing, after Bosnia and Herzegovina, according to Deloitte Property Index 2022, carried out in 23 countries and 68 cities, with an average price of 1,266 EUR/m², calculated on the database of the main cities and towns of the country. Compared to the previous year, the average price is 7.3% higher. The list of countries on the continent with the lowest average prices also includes Serbia (1,520 EUR/m²) and Portugal (1,537 EUR/m²)*.

In the ranking of cities, the most expensive in our country is Cluj-Napoca, with an average of 1,940 EUR/m², followed by Bucharest (1,573 EUR/m²) and Brasov (1,348 EUR/m²).

With regard to housing affordability in each country, calculated as the average number of raw annual salaries required to buy standard housing (70 m²), Romania ranks seventh out of the 19 countries for which this indicator was calculated. Thus, a Romanian needs 6.3 annual salaries for such a purchase. According to the study, the hardest to reach housing is in the Czech Republic, where 13.3 average annual gross salaries are needed for housing, and the most affordable is in Ireland (3.1 average annual salary), Norway (4.4) and Belgium. (4.5).

“The real estate market is considered a barometer of the economy, being influenced by several factors, such as the availability of land for real estate developments, the supply of raw materials and other products, construction costs, the market for l energy, etc., but also by the purchasing power of the population and by financing conditions. This year, an important factor will be the accessibility and cost of credit, strongly influenced by inflation. In 2021, the average annual interest rate for RON-denominated mortgages has fallen below 4%, according to NBR data, but is expected to rise from this year onwards, amid widespread inflation. , real estate investments are considered an asset class that protects the value of the investment over time,” said Alexandra Smedoiu, Partner, Deloitte Romania and leader in the real estate sector.

The United Kingdom ranks first in the list of countries where housing is the most expensive, after an annual growth of nearly 21%, at an average price of 4,905 EUR/m². Austria, with a lead of 7.3%, ranks second, with an average of 4,782 EUR/m². Prices above EUR 4,000/m² were also recorded in France (EUR 4,639/m²) and Germany (EUR 4,600/m²). In contrast, with the cheapest accommodation among the countries for which national data is available, are Bosnia and Herzegovina (974 EUR/m²) and Romania (1,266 EUR/m²).

In contrast, Hungary leads the price increase category, with an annual increase of 21.5% in 2021 compared to 2020, followed closely by the United Kingdom (21%), Slovakia (19 .5%) and the Czech Republic (18.4%). Overall, house prices increased last year in 18 of the 21 countries for which this indicator was calculated. At the same time, price decreases were recorded in Spain (8.5%), Slovenia (3.8%) and Latvia (1.3%).

The ranking of European cities with the most expensive housing is led by Paris, with an average price of 13,462 EUR/m² for an apartment, followed by Munich (10,500 EUR/m²) and London (8,426 EUR/m²). Among the cities where houses are more expensive than those in the country’s capital are Barcelona in Spain (6,251 EUR/m²), Antwerp in Belgium (4,050 EUR/m²), Milan in Italy (3,844 EUR/m²) and Cluj-Napoca in Romania (1,940 EUR/m²).

“Romania is among the countries analyzed where housing prices in large cities exceed the national average, and Cluj-Napoca stands out with a difference of more than 50%, while in Bucharest they are only 25% more students. Thus, regional disparities across the country also impact the real estate market, both in terms of transaction prices and in terms of investor appetite for residential project developments. The West region has a clear advantage from this point of view and it is expected that urban concentrations will also emerge in the other regions, with the modernization of infrastructures which will promote economic development,” said Marius Vasilescu, Director of Financial Advisory, Deloitte Romania.

The 11the edition of the Deloitte Property Index study analyzes the evolution of the residential real estate market in 23 countries and 68 European cities in 2021.

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