Bucharest’s residential market recovered much of the ground lost following a weak start to the year and ended the first half with apartment transactions down by only 2% compared with the same period in 2025, according to data analysed by Colliers. At the same time, developers are accelerating preparations for new projects, after the net floor area authorized for residential buildings in Bucharest increased 3.6-fold in the first five months of the year, the strongest pace in the past five years. Nationwide, apartment sales fell by 9%, indicating that the market remains cautious amid inflation, high financing costs and pressure on real incomes. Nevertheless, interest in buying a home remains high, as also shown by the latest Eurostat data on purchase intentions.
Trends differed, however, across the major regional cities. Cluj-Napoca, one of Romania’s most expensive and mature residential markets, recorded a 16% fall in apartment transactions during the first six months, while Iași was down 11%. By contrast, Timișoara posted a modest increase of 3% compared with the first half of last year. These differences show that the market is not moving uniformly and that affordability, price levels, available supply and the structure of local demand are playing an increasingly important role in transaction volumes.
This performance confirms the emergence of a more selective market, in which buyers and developers respond differently to the same conditions. Buyers are paying closer attention to price, the total cost of home ownership and their level of indebtedness and are more willing to postpone a decision when the product, location or commercial terms do not clearly meet their expectations. At the same time, developer interest in the residential market remains high, both among established players and among new investors or developers considering entering the local market.
Signs of future supply are also visible in building permit activity. Although permits do not translate immediately into completed homes, their recovery is important for Bucharest’s residential market over the next two to five years, particularly after a period in which the new development pipeline was constrained by administrative bottlenecks, high construction costs and planning uncertainty.
”After several years in which many projects were postponed or stalled, developers are once again taking a closer look at the new housing pipeline. This is not an exuberant recovery, but a measured repositioning. New supply remains limited, latent demand is present, and Bucharest continues to need well-connected homes that reflect buyers’ actual budgets. Developers able to secure good sites, permits and predictable construction costs will therefore be better positioned for the next market cycle”, explains Gabriel Blăniță, Director | Valuation & Advisory Services at Colliers Romania.
Financing also provides a sign of stability. Mortgage-backed purchases continued to account for approximately 58% of the total, broadly in line with last year. This shows that, although financing remains expensive, mortgage lending continues to support a significant share of the market, and some buyers have adjusted to the new interest-rate environment. Budgetary pressure nevertheless remains high. House prices have generally continued to rise more slowly than inflation, but wages have followed a similar trajectory, meaning that genuine affordability has not improved significantly.
July could bring a higher volume of registered transactions as the deadline approaches for completing certain purchases eligible for the reduced VAT rate, Colliers consultants estimate. The concession continues to apply to buyers who signed a preliminary sale agreement by 1 August 2025 and complete the purchase within the timeframe and under the conditions set out by law. A similar effect was seen last year, when the removal of the reduced VAT rate and the increase in the standard rate accelerated purchasing decisions and made July one of the most active recent months for the residential market.
However, these temporary peaks do not alter the underlying trend, Colliers consultants emphasise. The market is becoming more selective, and buyers are comparing available projects more carefully before deciding. Price remains important, but access to public transport, time spent in traffic, energy efficiency, construction quality, proximity to essential services and ongoing housing costs are increasingly influential. Projects without clear positioning or which do not address a genuine market need will therefore require greater commercial flexibility to maintain their sales pace.
In Bucharest, transport infrastructure will increasingly shape the residential development map in the years ahead. The expansion of the metro network, upgrades to tram lines, investment in road infrastructure and better links between peripheral and semi-central areas and major office hubs could change the appeal of certain neighbourhoods and open new areas for residential development. Projects combining good transport access with services, green spaces, energy efficiency and clear positioning will consequently enjoy a stronger competitive advantage.
”Differentiation is no longer merely a marketing consideration; it is becoming a prerequisite for absorption. Buyers are more cautious, compare more options and consider not only the price of the apartment but the full cost of home ownership. In the coming years, transport infrastructure will redraw Bucharest’s residential attractiveness map. Areas currently regarded as secondary could become significantly more appealing if they gain better access to the metro, tram services or road infrastructure, and developers who anticipate these changes will have a clear advantage”, adds Gabriel Blăniță.
In the short term, market performance remains closely linked to the macroeconomic environment. Financing is still expensive, and a more visible recovery in lending will depend on inflation easing and on when interest rates begin to adjust more clearly. At the same time, the budget deficit showed signs of improvement in the first months of the year, but fiscal consolidation remains a long and difficult process, with implications for consumption and investment. Under these conditions, a visible economic recovery is not expected before 2027, although the residential market can begin laying the foundations in 2026 for a new cycle that is more selective and more focused on quality.
Over the medium term, Colliers consultants believe that market fundamentals remain favourable, as Bucharest and Romania’s other major urban centres continue to need new, well-connected and efficient homes. At the same time, limited supply, the permitting difficulties of previous years and accumulated latent demand could maintain upward pressure on prices, particularly in well-positioned projects. The market is therefore going through a period of recalibration, Colliers consultants conclude, in which success will increasingly depend on developers’ ability to deliver products suited to new economic realities and buyers’ more exacting expectations.