The local residential market, including that of Bucharest and its surroundings, continued its significant rebound at the beginning of 2024, following the trend that started at the end of the previous summer, with a significant increase in the number of homes sold and the volume of new mortgage loans granted, according to the latest analysis conducted by SVN Romania.

After setting a new record for residential unit sales in the last three months of the previous year in Bucharest and Ilfov County, 2024 started with a 15% increase in the number of real estate transactions in the region, according to data from the National Agency for Cadastre and Real Estate Advertising (ANCPI).

The pace of sales intensified in February, with an annual increase of about 31%, while in March, there was a 15.6% increase in home sales in Bucharest and its surroundings compared to the same month of the previous year, according to official statistics published by ANCPI.

Overall, in the first quarter of this year, there was a 21.6% increase in home sales in the capital region compared to the first three months of 2023.

Although this is a positive result confirming the market rebound trend seen in the last six months of the previous year, it's essential to consider that the results at the beginning of 2023 were weak.

Compared to the first quarter of 2022, the record year for home sales in Bucharest and its surroundings, the first quarter of this year brought a result lower by approximately 6.5%. However, the result in Q1 2024 is 9% higher than that of Q1 2021.

The revival of demand can also be observed by analyzing the annual evolution recorded in the last five quarters: -23.2% in the first quarter of 2023, -30% in the second quarter, -3.8% in the third quarter of the previous year, +0.8% in the last quarter of 2023, and +21.6% in the first three months of 2024.

The resurgence of the local residential market can be explained especially by the solid fundamentals that underpinned the results recorded in 2022, the record year for local home sales: the very good level of affordability of buying a home, calculated as the ratio between prices and salaries, and the majority percentage of transactions made exclusively with own funds.

The multiple offers of fixed-rate loans of under 6% per annum, launched starting from the months of May – June of last year, led to a thawing of mortgage demand, and the decrease in inflation and the positive evolution of prices, in a context of multiple negative scenarios, resulted in the elimination of uncertainties.

Last but not least, the increase in the VAT rate for the purchase of new homes had the role of taking out a certain component of demand from a state of wait-and-see, although the effect of this measure was undetermined, as evidenced by the excellent results recorded in Q1 2024. (Photo: Freepik)