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The launch of BR’s Real Estate Guide: Major Insights Into Romania’s Property Market In 2024 took place on July 18 with the occasion of the annual Real Estate & Constructions Forum and Awards Gala. If you couldn’t join us at the Crowne Plaza to get your own print copy, the digital version (PDF) is now available for download.

Editorial: Market slowly moves into lower interest environment

By Ovidiu Nicolae Posirca, Coordinating Editor

Romanian homebuyers got some welcome news in early July, when the central bank cut the key interest rate for the first time in year and a half. This came one month after the European Central Bank (ECB) had reduced its key interest rate for the first time since 2019. In the US, the Federal Reserve seems to be in no hurry to make a similar move, although one rate cut could take place later this year if inflation continues to fall. The rate cut trend could feed more optimism on Romania’s real estate market, especially for developers who are exploring new projects. While most of the funding for commercial and residential projects is secured in euros, homes are bought in the Romanian currency. With a clearer path on the funding side and projected drops in interest rates for mortgages, we might see more residential projects starting in regional cities, but not so much in Bucharest, where the permitting process has grinded to a halt. More Romanians might be enticed by lower financing costs to purchase a home, which would consolidate a growth trend that has already started on the residential market. Residential developers are also seeing prices for new homes continue to grow. This is explained by various factors, including the limited pipeline for new developments, costlier technologies needed for green buildings, and higher risks associated with permitting procedures. The lower funding costs could also be good news for office developers, who are still exploring the potential of new projects, considering the changes to the way we work. Offices are here to stay in the long run, but the Bucharest market is once again showing that in the short term, the existing stock is more than enough. While a single new office building will be completed in the city this year, the pipeline is also limited next year, and financing costs can’t fully explain this situation.

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Going forward, we might see developers starting new office buildings only under strong pre-leasing agreements or tailor-made projects for specific companies. This only shows that the market is further stepping into maturity, which is also an encouraging sign for new international players that are still exploring their entry into Romania.

Contents:

• Local market dominated by sustainability and mixed-use development trends
• One Mamaia Nord: where nature meets urban elegance
• CPI Romania sharply focused on integrating ESG solutions
• InteRo Property Development investing over EUR 1 billion in Bucharest
• Vastint Romania’s ESG strategy built on a foundation of environmental sustainability
• Bucharest startup scene maintains positive outlook as economy grows
• Investment market sentiment positive in 2024
• Developers point to further growth in commercial rents
• ARQA: premium quality, attention to detail, and community-oriented designs
• Developers looking to bolster ESG-oriented developments
• How are ESG-oriented mixed-use developments changing the urban landscape?
• Genesis Property’s approach to ESG is collaborative and tenant-centric
• Office development expected to pick up pace in coming years
• Local residential market facing price growth pressures over lower deliveries
• Hagag Development Europe’s pipeline in Romania tops EUR 280 million
• QUEENS District: Leading the Charge with Carbon-Neutral Offices and Renewable Energy
• Retailers pushing expansion pedal in Romania
• Plenty of room for growth in Romania’s industrial sector
• Romania to see major shift in property taxation to reflect market value