Residential Market Under Pressure: Apartment Transactions in Romania Down by 9% in Early 2025

The number of apartment transactions in Romania declined by nearly 9% in the first four months of 2025 compared to the same period last year, according to Colliers data.

In Bucharest, the drop was even more pronounced, reaching 12%, as access to financing became increasingly difficult amid economic instability and rising construction costs — factors that have shaped a challenging start to the year for the residential market.

2025 Off to a Slow Start After Weak 2024

After a nearly 20% decline in residential completions in Bucharest in 2024, the outlook for 2025 remains uncertain. Although the volume of construction works increased by 9% in Q1 according to official data, it is unlikely that the delivery pace will return to pre-2023 levels anytime soon.

Despite early-year challenges, demand for homeownership remains strong, nearing historical highs based on Eurostat surveys. However, for buyers who rely on credit, the purchasing process has become visibly more complex. Inflation, high financing costs, and potential fiscal tightening aimed at deficit reduction are further undermining housing affordability.

Persistent Inflation, Limited Policy Flexibility

Colliers consultants project that inflation will remain elevated over the medium term, which limits the central bank’s ability to ease monetary policy. At the same time, fiscal measures needed to reduce the budget deficit could put additional pressure on the housing market, both directly and indirectly.

As a result, 2025 is shaping up to be a difficult year for prospective buyers, especially those dependent on financing.

Financing Remains a Key Obstacle for Buyers and Developers

In addition to economic and inflationary uncertainties, limited access to financing is a major hurdle. High borrowing costs, coupled with a likely delay in the interest rate cutting cycle, are dampening both buyer demand and developers’ ability to launch new projects, especially in the mid-market segment.

Rental Market Grows in Relevance

In this context, the rental market is becoming increasingly relevant. For many, renting is no longer just a viable alternative, but a more affordable and flexible solution. In Bucharest, approximately 15% of residents live in rental housing, a share that is expected to grow in the coming years, aligning with trends seen in major European cities.

For buyers struggling to access mortgages, renting is becoming a natural transitional option. While the rental ratio in Romania remains below the European average, the direction is clear: affordability pressure and a shortage of new, centrally located units will continue to drive up rental demand.