Imoland Consulting reveals real estate market statistics for 2020
Due to the current economic uncertainty of Covid-19, 2020 is proving to be an interesting time for the housing market and its effects on real estate market trends. Whether you’re thinking of selling your home, buying a home or are just interested in the housing market, this article will help you understand the real estate market, especially in Bucharest.
Let’s have a look at what happened in major cities on the housing market in 2019:
- In Bucharest the average selling price of apartments rose by 5.84% (1.73% inflation-adjusted) y-o-y to 1,413€ per sq. m.
- In Cluj-Napoca apartment prices rose sharply by 10.1% (5.82% inflation-adjusted) y-o-y to 1,712€ per sq. m.
- In Constanta apartment prices rose by 8.33% (4.11% inflation-adjusted) to 1,210€ per sq. m.
- In Timisoara the average selling price of apartments went up by 5.47% (1.37% inflation-adjusted) to 1,273€ per sq. m.
- In Brasov the average selling price of apartments rose by 6.9% (2.74% inflation-adjusted) to 1,178€ per sq. m.
Having said that, the trend for 2020 was expected to go slowly higher on both housing and apartment market. And to have a better understanding on how the real estate market reacted let’s compare October and November 2019 vs. October and November of 2020. With the Covid-19 situation becoming a problem in 2020 on a global level most people were thinking the prices will drop a bit, instead there has been a slow but steady increase again for both the apartment and housing market.
Comparing the results of October 2019 vs. 2020 we have noticed that the new apartment market was higher by 4% (this converts in 55€ more/sq. m.) and also in November the increase is of 1% (this converts in 15€ more/sq. m.). If we are looking for older apartments for October we noticed a slow increase by 0.4% (5€ more/sq. m.) and for November by 1.2% (16€ more/sq. m.). When checking over the breakdown of prices per numbers of rooms of the apartments, we will notice an interesting fact and this has to do also with the impact of the present pandemic: all apartments of 1, 2 and 3 rooms have seen a growth in sales comparing with 2019, but the 4+ room apartments have seen a decrease. As people connected to the market every day, we couldn’t help to notice the demand for “anything with a garden”, which translates more or less into: people with a budget for 4+ room apartments, which normally would go ahead and buy or invest in this type of property, now prefer to buy a house with a garden. The uncertainty of having the freedom to move and travel around the world as much as we used too, has convinced this segment of the market to go lately for either apartments with a garden or houses.
In my business area – Iancu Nicolae, Pipera, Otopeni – the demand is higher than the offer. Having most of the best private schools located in this area (Cambridge just opened its location this year, British School, American School, Mark Twain etc.), clients who are renting or buying are mainly looking for villas. Clients that normally would pay 400k to 600k for a penthouse, now prefer to invest that or a little more and purchase a house just for that little extra green garden.
If we are looking at the part of the real estate that is suffering right now, there is no secret that the renting sector and especially the office buildings and spaces are the most affected ones, with big companies having most of their employees working from home. For this segment of the real estate most probably things will slowly get back to normal most probably by this time next year.
Overall the trend in real estate market in 2020 versus 2019 is for an increase of the price/sqm, and most probably after the year will finish we will see an overall increase on the Romanian market somewhere around 2 to 3% over the last year and this will mark the 6th consecutive year of growth.
With the new law in place that will be effective starting 1st of January 2021, that allows anyone to purchase properties up to 140.000€ value, with only 5% VAT, we see no reason not being optimistic for the future.
Wishing you Happy Holidays and a way better 2021, stay safe, stay healthy and if you need any advice or help within the real estate market, we – Imoland Consulting – are here to stay and we are here to serve and help you.
Article by Costa Trușcă – Real estate broker – Imoland Consulting
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