Romania ranks third in Europe for having the most affordable housing, following Bosnia and Herzegovina and Greece, with an average price of EUR 1,417 per square meter for a new home, up from EUR 1,266 per square meter in 2021, according to the Deloitte Property Index 2023 study, based on data from major cities in 27 countries.

On the opposite end of the spectrum, Austria is the most expensive European country, with a price of EUR 4,925 per square meter in 2022, followed by Germany (EUR 4,800 per square meter), France (EUR 4,639 per square meter), and Norway (EUR 4,204 per square meter). Most countries have seen increases in average prices for new homes, with decreases occurring only in the United Kingdom (-18.8%), Denmark (-9.7%), and France (-0.2%).

The study also reveals that an average Romanian needs 6.3 gross annual salaries to buy a 70-square-meter home, placing the country sixth in terms of affordability, behind Belgium (4.3 gross annual salaries), Norway (4.7 gross annual salaries), Denmark (5), Slovenia (5.6), and Italy (6.2).

Slovakia, with 14.1 gross annual salaries needed to purchase a new home, has the lowest affordability among the analyzed countries, followed by the Czech Republic (13.3 gross annual salaries).

"Last year was marked by uncertainty in the residential real estate market due to rising financing costs affecting long-term mortgage loans. In terms of volumes, although it seems we are witnessing a slight decrease in demand for residential properties, also due to the increasing financing costs and declining purchasing power caused by inflation, the market has slightly grown in the rental segment.

Expectations for the next 12 months are for housing prices to stabilize, according to the study, and recent data from the National Bank of Romania (BNR) show a revival in mortgage lending compared to 2022, both in lei and euros.

Another significant trend for the coming year is the focus on sustainable and energy-efficient housing, with informed consumers already looking for specific residential products," said Alexandra Smedoiu, Tax Services Partner at Deloitte Romania, Leader of Tax Consulting Services for the Real Estate sector.

The ranking of European cities with the most expensive housing is led by Paris, with an average price of EUR 14,622 per square meter for a new apartment, followed by Munich (EUR 11,400 per square meter) and London (EUR 9,163 per square meter). In Romania, the most expensive city is Cluj-Napoca, with EUR 2,363 per square meter and a 21.8% increase compared to the previous year, while Bucharest ranks second, with EUR 1,693 per square meter.

Thus, Romania is among the few European countries where the most expensive city is not the capital, along with Ireland, where Cork City is the most expensive, Italy, where Milan surpasses Rome, and Spain, where Barcelona takes the top spot.

Regarding the rental market, Dublin is the most expensive European city, according to the available data analyzed by the Deloitte study, with an average monthly rent of EUR 32.8 per square meter. Paris ranks second, with EUR 28.5 per square meter, followed by Oslo (EUR 28 per square meter).

At the other end of the spectrum, Bulgaria continues to have the lowest average rents, at EUR 4.6 per square meter for those living in Sofia, followed by Greece, where the average monthly rent in Thessaloniki is EUR 6.6 per square meter.

Romania is also among the countries with the lowest rents. The most expensive Romanian city analyzed is Cluj-Napoca, with an average monthly rent of EUR 8.6 per square meter, while renters in Bucharest pay an average of EUR 8.1 per square meter per month.

"Sustainability plays an increasingly significant role in any evaluation process, including housing, for both sellers and buyers.

Stimulated by regulatory requirements and numerous other stakeholders' interests, this trend has been accelerated by the significant increase in energy prices and is visible throughout Europe, where residential developers have been forced to seek alternative energy solutions, and homeowners have equipped their homes with solar panels, geothermal systems, or other renewable energy technologies," said Marius Vasilescu, Financial Advisory Partner at Deloitte Romania.

The 12th edition of the Deloitte Property Index 2023 analyzes the evolution of the residential real estate market in 2022 in 27 countries and 76 cities. All prices in the analysis are converted into euros for comparability.