Romania’s house prices continue to rise, albeit at a slower pace, amidst a struggling economy due to the pandemic. During 2020, the average selling price of apartments in Romania rose modestly by 2.44% y-o-y (0.95% inflation-adjusted) to €1,371 (US$ 1,662) per square metre (sq. m.), a sharp slowdown from an annual growth of 8.23% in 2019, based on the figures from imobiliare.ro. It is the weakest growth since 2014.

On a quarterly basis, nationwide house prices rose by 5.14% (4.98% inflation-adjusted) in Q4 2020.

Romania’s economy is estimated to have contracted by only 5.2% in 2020, based on the European Commission‘s forecast, following y-o-y expansions of 4.2% in 2019, 4.4% in 2018, 7.1% in 2017 and 4.8% in 2016. The economy is projected to grow by 3.3% this year.

Nevertheless all major cities in the country reflect the nationwide trend of decelerating house price growth during 2020:

• In Bucharest the average selling price of apartments rose by a meager 0.85% (-0.42% inflation-adjusted) y-o-y to €1,425 (US$ 1,727) per sq. m, a sharp slowdown from the previous year’s 5.84% growth.
• Cluj-Napoca, Romania’s fourth most populous city, saw the biggest y-o-y increase in apartment prices of 7.48% (6.13% inflation-adjusted) to an average of €1,840 (US$2,230) per sq. m. Though it is still lower than 2019’s increase of 10.1%.
• In Brasov, the average selling price of apartments rose by 4.92% (3.61% inflation-adjusted) to €1,236 (US$1,498) per sq. m, down from the previous year’s 6.9% rise.
• In Constanta, the country’s oldest city, apartment prices rose by 2.48% (1.19% inflation-adjusted) to €1,240 (US$1,503) per sq. m, a sharp slowdown from the previous year’s 8.33% rise.
• In Timisoara, the average selling price of apartments went up by 1.49% (0.22% inflation-adjusted) to €1,292 (US$1,566) per sq. m, also a slowdown from a y-o-y increase of 5.47% in 2019.

Figures from the real estate intelligence platform Analize Imobiliare showed that the demand for residential dwellings in Romania’s six biggest cities increased 14% to about 154,500 units in Q3 2020 from the previous quarter, but still down by 12% from a year earlier.

In the first eleven months of 2020, residential building permits in Romania fell by 4% from a year earlier to 37,781, according to the National Institute of Statistics (INS) – after a slight y-o-y decline of 0.4% in 2019 and annual growth of 2.6% in 2018 and 7.6% in 2017. Likewise, the area of residential building permits issued fell by 3.4% y-o-y to 9.68 million sq. m. in Jan-Nov 2020.

There are no restrictions on foreign nationals acquiring dwellings in Romania. Ownership of land is tricky, but companies incorporated in Romania as well as resident foreign nationals and non-resident EU citizens can acquire land.