Romania’s residential market saw a sharp acceleration in July, recording record apartment sales both in Bucharest and in other major cities. Buyers rushed to complete transactions ahead of the removal of the reduced VAT rate and the increase in the standard VAT from 19 percent to 21 percent, effective from 1 August. In the capital, just over 5,000 apartments were sold – the third-best performance in the past two and a half years – with nearly half of all transactions taking place in Sectors 3 and 6, reaffirming these areas as the main hubs of residential development.

In Cluj-Napoca, July saw over 1,000 transactions – the highest level in the past three and a half years – confirming the upward trend of the local market. By contrast, Timișoara posted only a slight increase compared with the previous month, while sales in Iași slowed noticeably. Looking at the first seven months of 2025, the differences between the major cities are clear: Bucharest recorded a 7 percent decline compared with the same period in 2024, Timișoara was down 3 percent, and Iași dropped by 25 percent, while Cluj-Napoca posted a solid 14 percent increase. At the national level, the market remains broadly in line with last year.

In addition to the transactions officially recorded in July, the figures also include numerous pre-contracts signed by 1 August, through which buyers secured the application of the reduced VAT rate. Under the regulations in force, these transactions will be eligible for the tax relief provided the property is delivered by 1 August 2026.

“Essentially, this mechanism created a window of opportunity for both buyers and developers, speeding up negotiations and the signing of agreements ahead of the deadline, in an effort to avoid the additional costs generated by the VAT increase. Traditionally, sales peaks were recorded in December, when buyers and developers sought to close transactions before new legislative changes came into force on 1 January. This time, however, the rules of the game changed mid-year, and the market had to adapt on the spot. This shift in timing triggered a sudden wave of interest and significantly accelerated the pace of transactions, demonstrating the market’s ability to respond swiftly to new fiscal conditions”, explains Gabriel Blăniță, Associate Director | Valuation & Advisory Services, Colliers Romania.

In July, most buyers were individuals purchasing a home for their own use rather than investors, given that since 2023 the law has allowed the acquisition of only one property at the reduced VAT rate. Those who had already taken advantage of this benefit had no real incentive to rush into another transaction before 1 August. The increase in the standard VAT rate is expected to put upward pressure on prices in the coming period, although the actual impact will depend on the balance between supply and demand. Ultimately, the market will determine how much of the additional cost will be absorbed by developers, through reduced profit margins, and how much will be passed on to buyers via higher prices.

Some developers have announced that they will absorb part or even all of the VAT increase, at least until the end of the year, in order to maintain the attractiveness of their projects and sustain sales momentum. However, experts warn that the exceptional peak seen in July may prove to be the last in the short term. New taxes, higher property levies and a slowing economy are expected to put further pressure on demand. In this context, the final purchase price and the overall cost of ownership – also influenced by rising energy bills and increased property taxes – will play an increasingly decisive role in the choice between buying and renting, potentially prompting more cautious behaviour among prospective buyers.

“In this context, differentiation is no longer just an advantage but becomes essential in attracting both buyers and tenants. The residential market is moving into a more mature phase, where projects with a clear positioning, high energy efficiency and amenities tailored to current needs will outperform. In a more cautious economic climate, success will belong to developers who can combine build quality with sustainability and the long-term value of the investment”, emphasises Gabriel Blăniță.