Colliers: Apartment transactions down 9 percent in first four months of 2025

The number of apartment transactions in Romania fell by almost 9 percent in the first four months of the year compared to the same period last year. In Bucharest, the decline was even steeper, at 12 percent, according to data from Colliers. Tighter access to credit, economic instability and rising construction costs have made for a challenging start to the year for the residential market.

“The decline in activity in the real estate market is the result of several overlapping factors that impact both the confidence and purchasing power of Romanian buyers. A slowdown in the labour market, cooldown in wage growth, uncertainties tied to the electoral context, and the continued rise in housing prices have created a challenging environment for transactions. Access to bank financing has also become more restricted due to high inflation and ongoing economic instability. The pressure is even more acute in the case of new apartments. The removal of certain tax incentives in January 2025 has driven up labour costs, narrowing developers’ margins and pushing housing prices even higher. At the same time, the shortage of construction workers is becoming increasingly apparent, particularly as infrastructure projects advance at a rapid pace”, explains Gabriel Blăniță, Associate Director | Valuation& Advisory Services at Colliers România.

Following a 2024 in which housing deliveries in Bucharest dropped by nearly 20 percent, 2025 is not showing any convincing signs of recovery either. Although official data indicates a 9 percent increase in construction activity in the first quarter, the pace of housing completions is unlikely to return to previous levels any time soon.

Although the start of the year brought challenges for the residential market, interest in buying a home remains high and is approaching all-time highs, according to Eurostat surveys. However, the buying process has become visibly more complicated for those who are dependent on credit. Inflation, high financing costs, and potential fiscal measures aimed at reducing the budget deficit are further affecting housing affordability.

Colliers’ consultants expect inflation to remain high over the medium term, impacting the central bank’s aim to relax the monetary policy. At the same time, the fiscal measures needed to reduce the budget deficit could make housing even more unaffordable, either directly or indirectly. Therefore, 2025 is shaping up to be a challenging year for prospective buyers.

In addition to economic and inflation-related uncertainties, Colliers consultants emphasize that access to financing remains a major obstacle. High financing costs, coupled with a potential delay in the interest rate reduction cycle, are affecting not only demand but also developers’ ability to launch new projects – particularly in the mid-market segment.

In this context, the rental market is becoming increasingly relevant. For many, renting is not just a viable alternative but also a more affordable solution. In Bucharest, approximately 15 percent of residents live in rental housing, and this percentage could rise in the coming years, in line with trends seen in major European cities. For many potential buyers facing difficulties in obtaining a mortgage, renting becomes a natural transitional solution. Although the rental share remains relatively low compared to the European average, the direction is clear: affordability pressures and the lack of new stock in central and desirable areas will drive rental demand.

“Looking ahead, the dynamics of the residential market will largely depend on monetary and fiscal policy decisions, labor market stability, and the developers’ ability to adapt to new cost and demand conditions. While the decline in transaction activity reflects a period of adjustment, the fundamental interest in urban living remains strong. As a result, the market is expected to remain active, though at a more moderate pace, with an increasing focus on efficiency and affordability”, concludes Gabriel Blăniță.