Eurobank Property Services study: 2016 Q4 Residential Indices remain stable

Eurobank Property Services (EPS) releases the latest figures of the Residential Property Index for the Romanian residential market, covering the fourth quarter of 2016. The EPS Residential Index includes over 11 years of historical data, starting from mid-2005.

The national index of the new issue of the EPS residential price indices of Romania, remains stable, recording a slight increase of 1.4 percent in the fourth quarter of 2016 in comparison to 0.1 percent recorded in the third quarter of 2016. The upward year-on-year trend persisted and resulted in an overall increase of 4.2 percent year-on-year, since the corresponding quarter of 2015. The price stabilization in combination with the 0.9 percent change per annum during the past five years, suggests that, the succeeding price stagnation of the residential market of Romania continues, with clear signs of price recovery.

These optimistic signs are also confirmed by the index of Bucharest that preserved its year-on-year upward trend by 4.8 percent, higher than the year-on-year evolution of 3.9 percent registered in Q3 2016. An upward year-on-year trend was also observed in the index of Bucharest Ring, whose upward trend continued by 4.3 percent, in line with the third quarter of 2016. Central Bucharest also presented a positive year-on-year price growth of 4.2 percent, while the Bucharest and Ilfov Region exhibited positive year-on-year price growth of 4.4 percent in the fourth quarter of 2016.

The eight divisions of Romania exhibited rising year-on-year trends, with an average of 4 percent. A moderate year-on-year increase of 0.4 percent was recorded only in the North Division.

The individual indices of the 11 large cities of Romania present a stable quarter-o-quarter performance overall, with quarterly fluctuations that appear to consist of short term corrections or statistical noise, rather than any solid indication of a distinguished performance, either positive or negative. On the other hand, the year-on-year evolution is showing consistent upward trends for most of the large cities.

The prices of new properties in Bucharest continued their over-performance by 4 percent year-on-year. This positive evolution in prices of the new properties in Bucharest leads to a price increase on this segment of 3.6 percent year-on-year at a National level, too.

Overall, the new issue of EPS residential price indices suggests that the price stagnation is present in areas outside the large cites, while the individual indices of the 11 large cities show a small price increase with signs of a gradual formation of a consistent trend. The indication that the national index also seems to start changing its trend may be suggesting that the price stagnation is coming to an end and that price growth will become a consistent trend at the national level as well.

Eurobank Property Services S.A. is a subsidiary of Eurobank Group. Established in June 2005, as an integrated service centre, the company offers complete real estate solutions. Eurobank Property Services has developed a vast network in the Romanian territory, operating from its Head Office in Bucharest. Eurobank Property Services has managed to maintain its competitive position among the top real estate companies in Romania, by developing an important portfolio of customers including banks, with Bancpost being the main client, public institutions, real estate funds, foreign investors, local real estate development companies, as well as private companies.