Romania remains in third place in the ranking of European countries with the cheapest housing, surpassed only by Bosnia and Herzegovina and Greece. In 2023, the average price for a new home in Romania was 1,504 euros per square meter, a slight increase from 1,461 euros per square meter in 2022, according to the Deloitte Property Index 2024, which analyzed data from major cities in 24 countries.
On the opposite end, Austria is the most expensive European country, with a price of 4,920 euros per square meter in 2023, followed by Germany (4,700 euros/sqm) and France (4,538 euros/sqm), although these countries saw price decreases compared to 2022.
According to the Deloitte analysis, 15 out of the 24 countries studied saw increases in average prices for new homes, with the most significant being in Hungary (13.3%) and Poland (12.2%). Conversely, notable decreases were observed in Italy (minus 10.7%), Denmark (minus 3.8%), Norway (minus 3.5%), and the United Kingdom (minus 3.3%).
In terms of housing affordability, while in 2022 a Romanian needed, on average, 6.3 gross annual salaries to buy a new 70 sqm home, this average decreased to 5.9 salaries in 2023, placing Romania fourth in the affordability ranking, after Denmark (4.7 gross annual salaries), Norway (4.8), and Italy (5.3).
The Czech Republic is the European country with the lowest affordability among those analyzed, where 13.3 gross annual salaries are needed to buy a new home, followed by Slovakia with 12.7 gross annual salaries.
The ranking of European cities with the most expensive housing is led by Paris, where the average price for a new apartment is 14,900 euros/sqm, followed by Munich (10,900 euros/sqm) and Inner London Metropolitan Area (8,018 euros/sqm).
In Romania, the highest housing prices are recorded in Cluj-Napoca, at 2,434 euros/sqm, with a 3% increase from the previous year. Bucharest ranks second, with 1,726 euros/sqm, followed by Brașov with 1,618 euros/sqm.
Thus, Romania is among the few European countries where the most expensive city is not the capital, along with Belgium, where Antwerp is the most expensive city, Italy with Milan, Germany with Munich, and Spain, where Barcelona takes the top spot.
“The evolution of the residential real estate market in Romania in 2023 was also influenced by high interest rates, which impacted both developers, by increasing construction costs, and buyers, who faced higher prices and increased mortgage interest rates. However, the signals sent by both the European Central Bank and the National Bank of Romania, by starting the process of reducing interest rates amid decreasing inflationary pressures, have the potential to revive investments in the sector on one hand, and to stimulate mortgage lending on the other. Furthermore, the expected economic growth and the increase in population income are likely to boost activity in the sector in the coming period,” explains Irina Dimitriu, Partner at Reff & Associates Deloitte Legal, leader of real estate advisory services at Deloitte Romania.
On the rental market, the Inner London Metropolitan Area climbed three positions in the ranking and became the most expensive European city, according to the Deloitte study, with an average monthly rent of 33.8 euros per square meter. Dublin ranks second, with an average rent of 31.5 euros/sqm, followed by Paris with 31.3 euros/sqm.
At the other extreme, the city of Patra in Greece has the lowest average rent, at 6.3 euros/sqm, followed by Burgas in Bulgaria, where the average rent is 6.9 euros/sqm.
In Romania, Cluj-Napoca is the city with the highest rents, with an average monthly rent of 9.7 euros/sqm, followed by Bucharest, where tenants pay an average of 9.2 euros/sqm per month. Both cities have seen rent increases compared to the previous year.
“Prices and rents for housing in Romania in 2023 were also influenced by a decrease in the number of transactions in the residential real estate market, by approximately 10% compared to the previous year, as well as by the slowdown in housing construction activity, by almost 6%. Therefore, there is a need to stimulate activity in this market, to increase supply and thus meet the growing demand that is currently manifesting, as well as in the medium and long term,” adds Marius Vasilescu, Partner at Financial Advisory, Deloitte Romania.
The 13th edition of the Deloitte Property Index study analyzes the evolution of the residential real estate market in 2023 in 24 countries and 69 cities.
