Against the backdrop of a reduction in the number of domestic real estate transactions, the growth rate of housing prices has continued to slow down in the third quarter of 2018. According to the latest market report by imobiliare.ro, residential properties available for sale in Romania appreciated by only 0.7 percent compared to the previous three months.
The annual growth rate of prices (T3 2018 versus T3 2017) is currently at 5.6 percent – in the same period of 2017, the same indicator was close to the threshold of 10 percent.
“The real estate market looks good, paradoxically, we could say, in the context of an invasion of more or less well-informed opinions that predict a possible crisis. But at this point there are no indicators for an upcoming real estate crisis. And I make this statement with the responsibility of the entrepreneur with residential projects active in three cities in the country: Arad, Brasov and Timisoara. Property prices will continue to grow in the long run, even if we also see inevitable punctual corrections. The value of real estate assets is valid over time, making it true that there is no better time to buy a real estate than the time that has just passed. Caution, of course, is good, but the creation of panic is not. The indicators we are looking for give us confidence to build on and wait for a good 2019 in terms of market stability, ”said Valentin Morar, CEO of developer Wallberg.
In the third quarter of the year, apartment prices have increased in all six major cities constantly monitored by imobiliare.ro. However, in line with the national trend, price variations were significantly lower than in previous years, falling below the 2 percent threshold. In Cluj-Napoca, sellers’ claims rose 0.9 percent over the past three months, to a value of EUR 1,520 per sqm. Here, the 12-month price differential is now at 8.6 percent (compared with about 14 percent in the previous quarter). Cluj-Napoca is still the only large regional center of the country where apartments are more expensive now than ten years ago, the difference being 6.2 percent compared to Q3 2008.
As in the second quarter of the year, in the third quarter, Brasov was at the forefront of the price rises recorded in the major cities of the country. Here, the average amount demanded by apartment vendors increased by 1.7 percent over three months, reaching a value of EUR 1,060 per sqm). In this context, the city at the foot of Tampa exceeds Cluj in terms of price differences at 12 months, with an advance of 8.9 percent. Compared to 2008, however, the apartments in Brasov continue to be about a quarter (25.9 percent) cheaper.
In Bucharest, out of the six large regional centers analyzed, the smallest advance in apartment prices, namely 0.4 percent, to EUR 1,290 per sqm. Compared to the similar period of 2017, the capital’s apartments are 6 percent more expensive; compared to Q3 2008, however, this type of property is 35.9 percent cheaper – the capital has, among the big regional centers analyzed, the most to recover from the decline caused by the recession period.
The general downward trend in housing price hikes can be attributed to the stabilization of the residential market in the context of declining appetite for purchases. According to the data, the demand for residential properties in the major cities of the country was at a level 2 percent lower than in the similar period of 2017, in the quarter. Past purchases appetite diminished in most cases: -18 percent in Constanta, -9 percent in Iasi, -7 percent in Brasov and -3 percent in Timisoara, respectively.
On the other hand, in the context of a negligible increase of just 1 percent, it can be said that the demand remained practically at a constant level in Bucharest. In Cluj-Napoca, however, an important advance can be observed, 13 percent more than in the previous year.
Under these market conditions, the negotiations margins applied to the apartment segment were higher in the third quarter of 2018 than in the similar period of 2017 in most major cities analyzed. Of the regional centers with an average price of over EUR 1,000 per sqm useful for the apartments available for sale, Craiova is distinguished by the highest negotiations margin, namely 4,5 percent in Q3 2018 – for comparison in the similar period of the year the same indicator was 2.4 percent.
Salespeople in Bucharest, on the other hand, are willing to leave at a price of 3.4 percent (compared to 3.3 percent in Q3 2017), as did those in Brasov (versus 3.1 percent 12 months ago) . In Timisoara and Cluj-Napoca, the negotiating margin accepted by the owners is close to 2.6 percent and 2.5 percent respectively (compared with 2.2 percent and 2.1 percent respectively the similar period of 2017).