Overall, 15 out of the 24 countries saw increases in average prices for new dwellings, the most important being in Hungary (+13.3%) and Poland (+12.2%), while significant decreases were noted in Italy (-10.7%), Denmark (-3.8%), Norway (-3.5%) and the United Kingdom (-3.3%).
On the other hand, housing in Romania has become more affordable than a year ago. If in 2022 a Romanian needed 6.3 average gross annual salaries at national level to purchase a new 70 sqm dwelling, in 2023 the average dropped to 5.9 salaries, which places our country fourth in the top of the affordability, after Denmark (4.7 gross annual salaries), Norway (4.8) and Italy (5.3). The least affordable European country among those analyzed is the Czech Republic, with 13.3 gross annual salaries needed to buy a new home, followed by Slovakia (12.7 gross annual salaries).
”The Romanian residential real estate market continued to be influenced in 2023 by high interest rates, which impacted both developers, by increasing their construction costs, and buyers, who faced high prices and higher mortgage interest rates. However, the signals sent by both the European Central Bank and the National Bank of Romania, by starting to cut interest rates, as inflationary pressures ease, have the potential to boost real estate investments and to encourage mortgage lending. Moreover, the economic growth prospects and the increase in household incomes are expected to boost the market activity in the near future," said Irina Dimitriu, Partner at Reff & Associates | Deloitte Legal and Real Estate Industry Leader at Deloitte Romania.
Paris continues to lead the top of the most expensive European cities, with an average price of €14,900/sqm for a new apartment, followed by Munich (€10,900/sqm) and inner London (€8,018/sqm). In Romania, the most expensive city is Cluj-Napoca, with €2,434/sqm and 3% increase compared to the previous year, while Bucharest ranks second, with €1,726/sqm, followed by Brasov, with €1,618/sqm. This places our country among the few European states in which the most expensive city is not the capital, alongside Belgium, whose ranking is led by Antwerp, Italy with Milan, Germany with Munich and Spain, where Barcelona ranks first.
In the rental market, inner London rises three positions in the ranking and becomes the most expensive European city, based on the available data analyzed by the Deloitte study, with a monthly price of €33.8/sqm on average. The second ranked is Dublin, with price at €31.5/sqm, followed by Paris, with €31.3/sqm. At the opposite end, the city of Patra in Greece is the cheapest, with a monthly price of €6.3/sqm, followed by Burgas in Bulgaria (€6.9/sqm). In Romania, the most expensive city among those analyzed is Cluj-Napoca, with an average monthly rent of €9.7/sqm, followed by Bucharest, where tenants pay an average of €9.2/sqm per month, both up compared with the previous year.
"Housing prices and rents in Romania were influenced in 2023, among other factors, by the lower number of transactions concluded on the residential real estate market, by about 10% compared to the previous year, but also by the slowdown in housing construction activity, by almost 6%. Therefore, it is necessary to stimulate the activity on this market, in order to increase the supply and thus to meet the increasing demand that is emerging now and in the medium and long term," said Marius Vasilescu, Financial Advisory Partner, Deloitte Romania.
The 13th edition of the Deloitte Property Index study analyzes the evolution of the residential real estate market in 24 countries and 69 cities in 2023. All price statistics collected are converted into euro to provide comparable results.
