How have the largest real estate areas in Romania evolved in the period of January-September 2023, based on the announcements published on the Storia real estate platform? Brasov reported the highest percentage increase in prices for new homes, while Timisoara is the city with the lowest rents. Cluj-Napoca remains the most expensive city in the country, especially as housing prices have increased by almost 8%, and rents have increased by at least 13%, according to the most recent analysis conducted by Storia. The analysis is part of the "Smart Home Path" initiative, through which the brand aims to contribute to the transparency of information necessary for all buyers, tenants, owners, agents, and developers, with the aim of supporting them in making informed decisions.

BUCHAREST

Bucharest is traditionally the main real estate market in Romania, as about a third of all real estate transactions in the country are recorded here annually, but 2023 comes with more pronounced declines than the national average.

Thus, in the first nine months of the year, over 32,200 transactions were recorded in the Capital, a decrease of 21% compared to the similar period in 2022, in the context of a 16% decrease nationally.

However, the evolution throughout the year was somewhat similar to the national level: in the first quarter, the number of transactions decreased by almost 22% compared to the first quarter of the previous year, followed by a decrease of 32% in the second quarter. The market slightly recovered in the third quarter, with a 9% decrease in the number of transactions.

This evolution was largely influenced by the decrease in the number of mortgage loans granted, against the backdrop of rising interest rates in the first half of the year. The data shows that the number of active mortgages in Bucharest was about 15,500 in the first nine months of the year, a decrease of 22% compared to the similar period of the previous year. However, there is a somewhat surprising evolution in the market here, as the first two quarters brought declines of 19% and 44%, while the third quarter brought a 1% increase in the number of mortgages.

New home prices have risen by 3.5% in the last year

Like the rest of the country, home prices have risen this year, despite the decrease in the number of transactions. Thus, from January to September 2023, owners in Bucharest requested an average of 1,539 euros per square meter for new homes, an increase of 4% compared to the same period in 2022.

On the other hand, prices requested in ads for old homes increased at a less brisk pace, by 3%, but even so, they remain higher than those for new homes, as owners requested an average of 1,626 euros per square meter. One explanation for why, on average, in Bucharest, the prices of new homes are lower than the prices of old homes is related to location, and a segmented analysis by neighborhoods could show that prices for new homes are higher than prices for old homes.

Rents are increasing in all sectors

Meanwhile, rents have increased in all sectors of the capital at a faster pace than home prices. In fact, the minimum average increase was 10% regardless of the number of rooms. In general, the most affordable prices are recorded in sectors 4, 5, and 6, while Sector 1 is the most expensive regardless of the number of rooms.

Thus, the rent for a studio varied, on average, from 281 euros in Sector 5 (+12%) to 381 euros in Sector 1 (+11%), while for a two-room apartment owners requested a rent ranging from 420 euros (+10%) in Sector 4 to 608 euros (+19%) in Sector 1.

In the case of three-room apartments, rents varied from about 491 euros (+16%) in Sector 6 to 868 euros (+13%) in Sector 1.

CLUJ-NAPOCA remains the most expensive city in Romania

Cluj is the only county where the number of real estate transactions increased in the third quarter compared to the similar period in 2022, despite hosting the most expensive city in Romania.

In Cluj County, 6,532 real estate transactions were recorded in the first nine months of the year, a decrease of 14% compared to the similar period of the previous year. In other words, the market in this county had a slightly better evolution than the national average.

Thus, if in the first quarter the number of transactions was 36% lower than in the similar quarter of 2022, in the second quarter the decrease moderated to 11%, and the third quarter of this year brought an increase in the number of transactions by almost 10% compared to July - September 2022.

This is a trend that is faithfully reflected in the evolution of the number of active mortgages, which decreased by 35% in Q1 2023 vs. Q1 2022, by 28% in Q2 2023 vs. Q2 2022, and by only 1% in Q3 2023 vs. Q3 2022. Thus, the number of active mortgages in the first nine months of the year was 2,827, a decrease of 22% compared to the similar period of the previous year.

In fact, of the six major counties analyzed, Cluj is the only one that reported an increase in the number of transactions in the third quarter of the year, an important aspect especially in the context where Cluj-Napoca is the most expensive city in Romania regarding real estate.

Rents have increased by over 14%.

In the case of new homes available for sale in Cluj-Napoca, the average price per square meter for the period January-September 2023 was 2,480 euros, an increase of 6% compared to January-September 2022.

In addition, prices in Cluj-Napoca increased even more rapidly for old homes and approached those of new homes. For example, owners requested an average of 2,383 euros per square meter for an old home, 8% more than in the same period of the previous year.

Thus, for new homes, owners requested an average price about 2% higher than for old homes.

Percentage-wise, prices have increased even more in the rental segment, and Cluj-Napoca remains the most expensive city in the country, with an average rent of 333 euros for studios in January-September 2023, an increase of 13% compared to the similar period in 2022.

Meanwhile, two-room apartments were rented, on average, for 516 euros, corresponding to an increase of 16%, while three-room apartments reached 650 euros, an increase of 20%.

BRASOV: the city with the highest price increase for new homes

The prices of new homes in Brasov have increased the most this year in percentage terms, leading to a difference of over 21% compared to the prices of old homes.

Brasov County recorded 6,981 real estate transactions in the first nine months of the year. In this case as well, we are talking about a decrease compared to the similar period of the previous year, but this is 9%, much lower than the national average of over 16%.

After an initial decrease of 9% in the number of transactions in the first quarter, the evolution of the market in the next two quarters was better than at the national level, the decrease being 6% in the second quarter and only 1% in the third quarter.

This is reflected in the evolution of mortgage loans granted, where the decrease was only 3% in the first nine months of the year, much better than the national average of 22%.

And, as in the case of Cluj, this trend is also reflected in the evolution of the number of active mortgages, which decreased by only 1% in the first nine months of the year compared to the similar period in 2022. Thus, at the end of September 2023, 1,808 active mortgages were reported in Brasov, compared to 1,826 in the similar period of the previous year.

In terms of real estate prices, Brasov also follows the national trend. Thus, owners requested an average of 1,620 euros per square meter for new homes, an increase of 9% compared to January-September 2022.

However, the growth was much more pronounced in the case of old homes, where prices increased by 11%, reaching an average of 1,336 euros per square meter.

This is also reflected in the average prices per square meter in the Brasov neighborhoods, where new homes are generally more expensive than old homes. However, the differences are not as pronounced as in the Capital.

As for rents, Brasov is among the cities where prices have increased the most this year. For example, rents for studios increased by 12%, two-room apartments by 18%, and three-room apartments by 14%.

TIMISOARA: the city with the lowest rents

The market in Timisoara recorded a slightly better evolution than the national average in the first nine months of the year, but the city continues to have the lowest average prices for new homes and the lowest rents.

Timis County recorded 4,338 real estate transactions in the first nine months of the year, a decrease of 17% compared to the similar period of the previous year. Unlike other counties, Timis County also recorded an increase in the number of transactions in the first quarter compared to the similar period of 2022, but the evolution was negative in the next two quarters.

At the same time, Timis County is the only county where the number of active mortgages increased in the first nine months of the year, by 9%, to 3,386. This means an increase of 277 active mortgages compared to the similar period of the previous year.

However, the evolution of the Timisoara market was influenced by a decrease in the number of transactions in the first two quarters, while the third quarter brought a 16% increase compared to the similar period of the previous year. This can be seen in the evolution of the number of active mortgages as well, which recorded a decrease of 20% in the first half of the year, followed by an increase of 23% in the third quarter.

In terms of real estate prices, owners in Timisoara requested an average of 1,289 euros per square meter for new homes, an increase of 4% compared to the similar period of the previous year. However, prices in ads for old homes increased by 11%, reaching an average of 1,196 euros per square meter.

This means that the difference in prices between new and old homes in Timisoara is much smaller than at the national level, namely only 8%.

And, as in the case of the other cities analyzed, the rent increased this year in Timisoara, with the smallest increase recorded for two-room apartments, 8%. For example, rents for studios increased by 11%, while for three-room apartments the increase was 14%.

The minimum average rent for a studio was 277 euros in Timisoara

In the case of Timisoara, the most affordable rents are recorded in the central area, with an average of 277 euros for a studio, 345 euros for a two-room apartment, and 438 euros for a three-room apartment. On the other hand, the most expensive rents are recorded in the metropolitan area, with an average of 331 euros for a studio, 436 euros for a two-room apartment, and 547 euros for a three-room apartment.

CONSTANTA: the biggest increase in rents

Constanța offers a stark contrast between the 6% increase in new housing prices and the minimum 29% increase in average rent.

The real estate market in Constanța has grown at a fast pace in recent years compared to the other counties of the country, and this is easy to see even in the public data that analyzes the evolution of the number of transactions.

In total, 5,688 transactions were reported in the county in the first nine months of the year, which corresponds to a 16% decrease compared to last year, a percentage similar to that recorded at the national level.

However, the evolution of the number of transactions fluctuated sharply from a decrease of 35% in Q1 to a meager increase of 1% in Q2, followed by a sharp decrease of 11%.

The seaside county registered 2,856 mortgages in the first nine months of the year, more even than Cluj county, and the evolution is better than the country's average, with a decrease of less than 12% compared to the national average of -22 %.

Moreover, Constanța is the only county in Romania where the number of mortgages increased both in the second quarter and in the third quarter, compared to the similar quarters of last year. Therefore, the initial 50% decline in Q1 was tempered by a 26% increase in Q2 and another 14% in Q3.

Rents increased by at least 29%

Partially, this is also visible in the case of data on house prices in the city of Constanța, the seat of the county. Between January and September 2023, the prices requested by owners increased by 7% in the case of new homes, up to 1,685 euros per square meter, with a close increase of 6% in the case of old homes, up to 1,542 euros per square meter.

Meanwhile, rents have increased in Constanța at a much faster rate than properties for sale. In fact, Constanța is the city in Romania with the highest increase in the average rent price, as they have increased by at least 29%, which is true in the case of three-room apartments, for which the owners asked an average of 602 euros per month.

But the increases are even bigger for smaller homes: two-bedroom apartments had an average rent price of €448, up 34%, while the rent for a studio apartment rose 39% to €281 of euros per month.

IAsi: the most affordable city for buying housing

Iasi is the most accessible city among the main urban centers in Romania and offers the smallest price difference between new and old homes.

Iasi is the most important county in Moldova, and this is also reflected in real estate transactions. Public data shows a total of 4,489 property transactions during the first nine months of the year, more than 18% fewer than in the same period in 2022, a slightly higher drop than the national average of 16%.

As in the case of most counties, Iași reported larger decreases in the first half of the year, namely 27% in the first quarter and 26% in the second quarter, to then significantly reduce the gap: in the third quarter the decrease of was only 3%.

Meanwhile, the number of active mortgages was 1,799 over the same time frame, down nearly 31%, well above the national average of -22%. Moreover, this is also visible in the quarterly evolution: -44% in Q1, -38% in Q2 and a tempering to -7% in Q3.

The smallest price difference between new homes and old homes

Among the six cities included in this report, Iasi is the urban agglomeration with the lowest housing prices, regardless of whether we are talking about new residential complexes or homes that are at least on the second sale.

New homes in Iasi rose in price by 6% between January and September 2023 compared to January and September 2022 and reached an average price of 1,412 euros per square meter.

On the other hand, the price of old houses in Iași increased at a faster rate, by almost 10% in the same period of time.

Thus, the average price reached 1,403 euros per square meter, and the price difference between new and old homes decreased to only 1%. In fact, this is the smallest percentage price difference between new and old homes among the six cities analyzed.

The lower housing prices compared to other large cities in the country are also reflected in the rent segment. 284 euros for a studio, 404 euros for a two-room apartment and 500 euros for a three-room apartment.

However, compared to outright home buying, rents have grown at roughly twice the rate, ranging from 14% for two-room apartments to 16% for three-room apartments, while asking prices for studios have they increased by 15%.