How will the luxury residential market evolve in 2025?
We expect the luxury residential market to continue its upward trend in 2025. Demand for luxury housing will remain high, supported by rising incomes and more favorable credit conditions. With the pandemic, buyers have become increasingly concerned about the standard of living and are willing to invest in spacious homes that offer comfort and modern amenities, such as access to green spaces, gyms, or personal offices.
However, market dynamics could be influenced by external factors such as the socio-political and economic climate. Presidential elections in the spring of 2025, along with potential tax changes, could influence purchase or investment decisions.
How will prices for luxury residential develop?
We anticipate that luxury residential prices in 2025 will continue to increase, but at a more moderate pace compared to previous years. This will mainly be driven by the supply-demand gap. The supply of luxury housing remains limited relative to demand, due to high construction costs, difficulties in obtaining permits and the limited amount of land available for development in prime urban areas.
In addition, significant increases in construction material and labor costs in recent years are contributing to the persistently high prices in the luxury market. Prices could also be influenced by policy decisions, such as possible changes in fiscal policies or property taxes. Economic stability and growth prospects in 2025 will have a significant impact on buyer confidence and developer investment, driving market dynamics.
Many luxury residential projects have been concentrated around the capital. Will we see such projects in other cities?
Although Bucharest continues to be the main hub for luxury residential projects, this segment is gradually expanding to other major cities in Romania. Cities such as Cluj-Napoca, Timișoara, Iași and Constanța have become important economic hubs, attracting high-income earners, expats and investors. These cities are benefiting from a growing demand for premium housing, fueled by IT professionals, entrepreneurs and luxury lifestyle seekers.
Improved infrastructure in regional cities, as well as easier access to highways, airports and public services make these locations high-potential alternatives for the development of premium residential projects.
What criteria does a residential project have to fulfill in order to be considered luxury?
An essential criterion of a luxury project is generous interior space. Luxury homes are designed to offer superior comfort, with spacious living areas and well-thought-out compartmentalization. In addition, outdoor spaces play an important role: private gardens and terraces with spectacular views offer residents privacy and a direct connection with nature. At the same time, wellness facilities are an indispensable element of any luxury residential project. Private swimming pools, saunas, fitness rooms and spas contribute to a health and relaxation-oriented lifestyle and are highly appreciated by customers in this segment.
Last but not least, location is a decisive factor. A luxury project must be located in an exclusive area, well connected to urban points of interest such as top restaurants, green areas, wellness centers, shopping centers or prestigious schools. A strategic location ensures both everyday convenience and long-term value for money.
Our project, Bonton Luxury Villas, developed in the Pipera area, meets the needs and desires of luxury buyers. The 66 villas are designed to accommodate extended families and ancillary staff, such as in-house nannies, with areas ranging from 353 to 404 square meters. Each villa includes up to seven spacious rooms, from living and dining rooms, bedrooms with en-suite bathrooms and dressing rooms, to home offices and two or three terraces. On the ground floor, the villas have private gardens and, optionally, each villa can be equipped with an indoor elevator.
Facilities range from a swimming pool and gym in a private club to recreational activities in the nearby Baneasa Forest. The strategic location also offers access to the best international schools, such as the American School, and the main areas north of the capital.
How important is the authorization issue in Bucharest, and beyond, for residential projects?
The authorization problem in Bucharest and other major cities is a major barrier for real estate developers and affects the entire residential market.
In Bucharest, obtaining the necessary permits for a residential project can take years. Excessive red tape, lack of coordination between the different institutions involved and complex procedures make the process significantly difficult. Developers face difficulties in long-term planning, which affects the flow of new projects.
Simplifying procedures, digitizing processes and creating a predictable urban planning framework are essential to unlock market potential and ensure the sustainable development of cities.
