The residential real estate market in Romania is showing significant trends as it heads into 2025, with various factors influencing its evolution. As reported by Imobiliare.ro and Imobiliare.ro Finance, the dynamics of the residential market and the credit sector are intertwined, as many Romanians rely on bank financing to purchase homes.
One of the most noteworthy trends is the slowing growth of apartment prices. Nationally, apartment prices surged by 13% over the past year. However, in major cities, the increases have been even more pronounced, with Brasov experiencing a remarkable 20% rise in prices. According to the Imobiliare.ro Index, by early March 2025, there was already a 4% increase in the asking prices from owners and developers compared to the end of 2024. This upward trend is expected to continue throughout the year, particularly in urban centers where demand remains high. Nonetheless, the growth rate is anticipated to be more tempered, as the rapid increases seen in 2024 are deemed unsustainable in the long term.
“In major cities, where demand remains high, we will continue to see price increases, but at a more moderate pace, as the strong growth of 2024 is not sustainable in the long term,” said Daniel Crainic, marketing director at Imobiliare.ro. “The uncertain context contributes to a tempering of buyer enthusiasm. However, this is precisely the period when we may encounter some purchasing opportunities.”
The rental market is also evolving, with the potential to become increasingly attractive. The rental sector is gaining strength in Romania, driven by rising home prices and growing interest from developers in build-to-rent projects. This resurgence follows a period where yields for property owners diminished. Rent prices for two-room apartments, which are the most sought-after by tenants, have increased by 5% to 11% in major cities over the past year.
Investments in apartments may face competition from financial instruments as some smaller investors, who previously focused on real estate purchases for short-term rentals, are now discovering options to maximize profits without the time and money required for property maintenance and management. State bonds have recently become more appealing, with annual interest rates reaching as high as 7.95%. “The fact that some investors are turning to state bonds reduces investor appetite but also speculation—contracting off-plan with the aim of reselling at a higher price. The pressure on prices decreases, making the residential market more stable and providing more space for end buyers,” Crainic explained.
Those who do not take advantage of current market opportunities may face serious competition later. The uncertainties that arose at the end of last year due to the presidential elections have also impacted the residential market's evolution. Although this may be a good period for identifying opportunities, some individuals with housing needs choose to remain on the sidelines until the election results are known. Buyers who have the financial resources should continue their searches and not hesitate to make offers when they find properties that meet their requirements. A possible scenario is that the election results could restore calm, both politically and socially, generating a new wave of interest among buyers, including the most cautious Romanians. This will inevitably lead to increased competition in the market for the best homes at the best prices.
The Interest Rate for Contributing Credit (IRCC) is expected to decrease starting in April, likely stabilizing around this value until year-end. The reduction of the key interest rate from 7% to 6.5% last summer allowed Romanians interested in mortgage loans in 2025 to enjoy a lower IRCC only at the beginning of this year. This translates to a drop from 5.99% to 5.66%, allowing slightly larger amounts to be accessed with the same income levels. A further reduction of the IRCC to 5.55% is anticipated at the beginning of April, which has the potential to stimulate demand across all segments of the residential market. This new value is expected to remain until the end of June. However, as long as the National Bank of Romania does not reduce the key interest rate, significant variations in the IRCC are not expected throughout the year.
“We estimate that there will be no reductions in the key interest rate at least until summer, so the IRCC will remain around 5.5% this year. This is normal considering we have again a revised inflation forecast that is higher than previous estimates, risks stemming from geopolitical instability and a trade war, risks related to Romania's external borrowing costs due to negative ratings, a budget deficit with uncertain coverage sources, and the leu-euro exchange rate continues to be under pressure. There are signals that after the elections, tax increases may follow, which could generate additional inflation, further slowing the decline in interest rates,” explained Dan Niculae, Managing Director of Imobiliare.ro Finance.
Fixed interest rates are decreasing, making standard mortgage loans more advantageous compared to the government program Noua Casă. Romanians looking to make a property purchase and needing bank financing have recently benefited from increasingly favorable fixed-rate offers. Last February, the best fixed rate available in the credit market was 5.75%, while at the end of last month, it had dropped to 4.79%. These offers are geared toward the purchase of modern homes and come with a set of eligibility criteria that must be met by those interested in obtaining a loan. Standard mortgage loans with fixed rates for a period of 3 or 5 years have become more advantageous even compared to the Noua Casă program, where beneficiaries can only opt for variable interest rates. The prices in the residential market significantly limit the number of homes that can be purchased under this program, which remains an option primarily for those who cannot save the necessary down payment to access the loan.
Credit availability has the potential to accelerate more rapidly this year. In January, approximately 30,800 houses, land, and apartments were sold in Romania, about 6,400 fewer than in the same period last year. Of the total, 8,400 were individual units, 17% less than in January 2024. The number of mortgages remained relatively constant, with a slight increase, despite the decrease in the number of transactions, indicating a positive evolution of the share of credit in real estate purchases at the beginning of the year. “The level of bank deposits among the population slightly decreased in January, but there are estimates that it will return to moderate growth throughout the year, while crediting will grow slightly faster, leading to an increase in the credit/deposit ratio. At the same time, the state has become a serious competitor in attracting liquidity through loans to finance the deficit, a short-term evolution that obliges banks to maintain attractive deposit interest rates,” Niculae stated.
New homes are increasingly desired by buyers. The decision to purchase is not solely dependent on price. Interest in new homes is rising nationally among Romanians, especially in major cities. Approximately 66% of those surveyed in the latest study conducted by Imobiliare.ro and Unlock Market Research expressed interest in homes completed after 2000 or properties recently completed or still under construction. This trend reflects that buyers are better informed than before and seek to live in modern spaces that provide added comfort and minimize maintenance costs. Not only price matters to them, but also the location of the property, highlighting the growing importance of lifestyle aspirations in choosing a home.
New residential supply may face declines due to administrative blockages, which have led to a significant decrease in new residential offerings in major cities. At the same time, there is increasing interest from buyers for homes completed in the last five years. The construction sector's progress is influenced by the effects of removing benefits dedicated to employees and the shortage of skilled labor. The lack of predictability remains a significant obstacle for developers, who typically need 2-3 years to complete a residential project from the moment they obtain construction authorization.
“Even though we see greater caution among buyers, the phasing of developments and the postponement of certain investments rebalances the supply-demand ratio. Therefore, buyers who need housing and have access to financing should understand that this period is favorable for purchases,” the marketing director of Imobiliare.ro stated.
Moreover, Romanians are increasingly willing to work with real estate agents than in the past. Over the past year, the number of people who turned to real estate agencies or accepted collaboration with specialists to finalize a transaction has increased. According to the latest market study conducted by Imobiliare.ro, 74% of those who had a real estate need in 2024 sought the assistance of an agent, compared to 62% a year earlier. This trend is expected to continue in 2025, as standards rise among real estate professionals and their service portfolios diversify.
