Romania’s residential market slowed in the first half of the year following several years of strong growth, but the data does not point to a major correction, according to Colliers’ first-half of the year report. Bucharest recovered much of the ground lost following a weak start to the year and ended the first six months with only around 2% fewer apartment transactions than in the same period of 2025. Nationwide, sales declined by approximately 9%, although the market remains above pre-pandemic levels. High inflation, expensive borrowing and pressure on household budgets are making buyers more attentive to prices, the total cost of home ownership and the quality of developments, while the supply of new homes remains limited.
Differences between Romania’s major cities are becoming increasingly evident. In the first six months of the year, apartment transactions fell by approximately 16% in Cluj-Napoca and 11% in Iași, while Timișoara recorded an increase of around 3%. These trends show that the market is moving at different speeds from one city to another, with pricing, affordability and available supply playing an increasingly important role in purchasing decisions.
The supply of new homes remains one of the main constraints on the market. Around 59,000 homes were completed nationwide in 2025, the lowest level since 2017, and no significant increase is expected in the short term. Bucharest, however, is showing more positive signs for the coming years: the authorised net area for residential buildings increased 3.6-fold in the first five months of 2026, the fastest pace in the past five years. Bucharest stands in contrast to the national trend, with the number of residential building permits falling by approximately 9 – 10% in the first half of the year and by around 15% year-on-year in June. Bucharest-Ilfov was the only region to consistently move in the opposite direction. Permits granted today do not immediately translate into completed homes, but they provide an important indication of how supply could evolve over the next two to five years.
Meanwhile, construction activity remains strong. The volume of residential construction works increased by approximately 16% in the first five months of the year, the fastest growth rate among the main construction segments. This points to more intensive activity, even though the impact on the number of completed homes takes time to become visible.
Higher costs, more cautious decisions
Construction costs remain a significant source of pressure. Prices for a number of building materials returned to growth in 2026, with some approaching record levels, while new costs related to the European carbon pricing mechanism for imported materials could add further pressure. Against this backdrop, developers are planning projects over longer cycles and adjusting their timelines based on how they expect the market to evolve over the next two to three years.
” We are not seeing a uniform decline across the market, but rather increasingly significant differences between projects and cities. Buyers are paying closer attention to what they receive for their money, while developers are becoming more selective about where and what they build. In Bucharest, the increase in permits is a positive signal for future supply, but the effects will not be immediate. We are primarily talking about projects that could reach the market over the next two to five years”, explains Gabriel Blăniță, Director | Valuation & Advisory Services at Colliers Romania.
Interest in buying a home remains relatively strong, while Eurostat’s indicator measuring intentions to purchase or build a home is still well above pre-pandemic levels, despite having eased from the highs recorded in recent years. Buyers are, however, more cautious: they compare prices, the total cost of home ownership and debt levels more carefully, and are more likely to postpone a decision if the property, location or purchase terms do not meet their expectations.
Developers, meanwhile, continue to seek opportunities. Interest remains strong among both existing market players and new companies considering entering the local market, including through acquisitions of land or projects that are already at an advanced stage of the permitting process.
One factor supporting demand is the resilience of the labour market. Between the peak recorded in March 2025 and May 2026, the number of employees declined by around 70,000, equivalent to just 1.3% of the total. By comparison, the economy lost more than 700,000 jobs between 2008 and 2010. At the same time, despite inflation in recent years, the purchasing power of the average real wage remains almost twice as high as in 2015.
July could emerge in the final statistics as a more active month, after some buyers rushed to complete purchases that were still eligible for the reduced VAT rate. Pressure towards the end of the month was, however, compounded by the unavailability of the National Agency for Cadastre and Land Registration (ANCPI) systems from 14 July onwards, following a cyberattack that disrupted some of the procedures required to complete real estate transactions. To prevent buyers who were already eligible from incurring additional costs for reasons beyond their control, the deadline for homes to be delivered at the reduced 9% VAT rate was extended from 31 July to 30 September 2026. A similar acceleration was recorded in July 2025 ahead of changes to the VAT regime, although the current extension to the end of September may spread some completions over a longer period and reduce the exceptional nature of any potential spike in transactions in July.
The ANCPI episode also highlights the residential market’s dependence on the proper functioning of administrative infrastructure. In a market where permitting, cadastral registration, land registration and contract completion are already lengthy processes, disruptions to essential systems can have a direct impact on transaction timelines, even when demand, financing and homes are available. For both developers and buyers, administrative predictability is therefore becoming almost as important as fiscal predictability.
Financing continues to support a significant part of the market. Approximately 58% of home purchases are financed through mortgages, a share similar to last year, suggesting that buyers have adapted to some extent to higher interest rates. The state-backed programme continues to support the more affordable segment, with a guarantee ceiling of 500 million lei in 2026 and an interest rate capped at IRCC plus two percentage points.
Affordability has not, however, improved significantly. House prices have generally risen more slowly than inflation, but wages have followed a similar trajectory. As a result, the relationship between incomes and housing costs has not changed enough to make buying a home significantly easier, nor has it deteriorated to an extent that would force a broad market correction, particularly after a decade in which the purchasing power of the average wage has almost doubled.
Prices remain resilient, but the gap between projects is widening
Limited supply continues to support prices. By mid-summer, asking prices in Bucharest were approximately 9% higher than a year earlier, with a similar trend nationwide. Monthly increases have nevertheless moderated, while performance is becoming increasingly differentiated from one project to another. Rather than uniform price movements, the market is seeing more case-by-case negotiations, discounts and more generous commercial packages where projects lack sufficiently clear positioning.
New homes in good locations, with strong access to transport and infrastructure, developed by reputable companies and offering better energy efficiency have performed more strongly. Older homes, particularly those in buildings that have not undergone thermal refurbishment, are at a disadvantage because of higher energy bills and maintenance costs.
” Price remains important, but buyers are paying increasingly close attention to the costs that come after the purchase, from energy and maintenance to time spent commuting. This is why we are seeing growing differences between projects rather than a broad-based decline in prices. Well-connected, efficient homes developed by reputable companies will continue to have an advantage, while more weakly positioned projects will need discounts or more attractive commercial offers to support sales”, adds Gabriel Blăniță.
The prospects for a stronger recovery in lending have become more distant compared with the beginning of the year. With inflation still close to double digits in mid-2026, the National Bank of Romania is expected to keep its key interest rate at 6.50% until 2027. This delays a reduction in financing costs and a more visible recovery in credit-supported transactions.
The broader economic environment also points to a gradual recovery. Colliers expects Romania’s GDP to contract by approximately 0.7% in 2026, compared with an estimate of close to 1% growth at the beginning of the year. Fiscal consolidation continues to weigh on consumption, while the sovereign rating was maintained at BBB- at the end of July, with a negative outlook. At the same time, the budget deficit narrowed to approximately 2% of GDP in the first half of the year, from 3.6% in the same period of 2025, a positive signal, although the consolidation process remains lengthy and dependent on political stability as well as the continuation of investment supported by European funds.
Over the medium term, demand remains supported by a genuine need for housing. Romania has one of the highest overcrowding rates in the European Union, while its major cities continue to need new, efficient and well-connected homes. Limited supply, permitting difficulties in recent years and accumulated demand could continue to support prices for well-located developments.
In Bucharest, transport infrastructure will play an increasingly important role in both home-buying decisions and developers’ investment strategies. Metro extensions, tram line upgrades and improved connections between peripheral or semi-central areas and major office hubs could increase the attractiveness of neighbourhoods currently regarded as secondary locations. Developments combining good transport access with services, green spaces, energy efficiency and clear market positioning are therefore likely to enjoy an increasingly visible advantage in the next market cycle.