The land market remained highly active in the first half of 2023, with an estimated turnover of approximately 250 million euros. This figure includes only land transactions for commercial real estate projects in sectors such as residential, offices, and retail, excluding industrial or energy segments, as reported in Colliers' market report on the evolution of the real estate market in the first half of this year.

The retail segment continues to attract the most attention as developers see opportunities in many areas across the country. However, as the summer period has been relatively quiet so far, Colliers consultants expect modest transaction volumes in the upcoming quarters.

Regarding demand, it has been almost evenly split between the retail and residential segments.

While retail developers have remained quite active, focusing mainly on land for retail parks/big-box stores in areas/cities with limited modern retail space, the residential sector has seen a more pronounced slowdown in transactions. This is due to higher interest rates and increased construction costs, which have led to a significant decline in activity, especially when compared to the period from 2020 to 2022.

As a result, there are many discussions about different partnership structures involving residential projects, as these can be mutually beneficial: developers prefer to share risks during this period of uncertainty, while landowners believe they can benefit more from the market's growth potential in 2-3 years.

The supply remains at a good level throughout most of the country, both in terms of large industrial land platforms and medium-sized plots suitable for various types of real estate projects.

Meanwhile, some investors are looking to acquire strategic land that retains its long-term value regardless of short-term economic fluctuations and also acts as an effective hedge against inflation.

At the same time, prices have remained more or less unchanged since the end of 2022, with property owners not under significant pressure to offer discounts. Decreased interest in new transactions has prevented any significant upward movement. Very good plots, especially those with valid urban planning documentation, continue to command high prices.

In Bucharest, the adjustment of the supply of new homes due to reduced demand was highlighted in the first quarter of the year by a more pronounced decrease in the number of homes delivered. Only 4,666 homes were delivered in the first three months of 2023, a 16% decrease compared to the same period last year.

The evolution of the residential market is closely linked to the overall economic situation, and the positive prospects for the Romanian economy were highlighted in the most recent spring forecast by the European Commission.

Despite the slowdown in economic growth in the European Union compared to 2022, Romania is the country with the highest projected economic growth in the CEE region and ranks third in the EU, with 3.2% in 2023 and 3.5% in 2024. These prospects contribute to a positive investment climate, along with the second-lowest inflation rate in the CEE-6 and the level of public investment in infrastructure.