3.02.2024
Which are the main challenges & opportunities for the residential market in 2024?
We consider that 2024 started with good premises and we are expecting the residential market to be more effervescent this year, as compared with 2023. We noticed at the beginning of the year a boosted interest in residential developments, through the increased number of leads accessing real estate portals.
One of the big challenges for this year remains the buyers’ capacity to access banking loans. An important aspect is that banks have understood the changes in the market and are now offering loas with fixed interest rates on five years, making the financing solutions much more attractive for residential buyers.
Another important challenge for the market is the 4% increase in VAT, adding pressure both on developers and future buyers. The difference will be absorbed either by the buyer, or the developer. We have decided to absorb this difference. However, this problem could lead to the decision of some developers to postpone building works for some projects, the delay of construction following to have a negative impact on labor market and consequently to the state’s budget.
We must not forget the administrative blockage from Bucharest: there are three years since our industry is no longer sustained and the urban development of Romania’s Capital City is frozen. 2024 is also an electoral year which will also influence the business environment.
Another important factor to notice this year is the effect of the fiscal construction facilities’ removal will have on the construction costs. Each developer will have to find solutions so that we will not witness major prices’ increase.
that the measure of the elimination of construction facilities will have and to see how much it will lead to an increase in the price per square meter built. It is obvious that the real estate market will be affected and that each individual developer will have to find solutions so that we do not witness dramatic price increases for the houses, and so few, that will be completed this year.
A positive aspect is that we can notice the decrease of inflation and we hope that there will be a significant decrease of costs. If we also observe the economic forecasts made by the European Commission, Romania is in an area of stability and a slight economic growth is expected, which we hope will also translate into the purchasing power of the Romanians.
The fact that Bucharest still has the lowest cost per square meter in Europe is something that should make us think. Despite the predictions of some analysts that the real estate market will collapse, and prices will fall, this will not happen. On the contrary, they will increase, considering that a few years ago the price per square meter was far below the European average.
This period, characterized as one of stagnation, can be seen as an opportunity for investors who want to avoid keeping savings in cash. I strongly believe that the purchase of new houses is the best option for real estate investors.
What are the company’s business targets for 2024?
Currently, we are developing Akcent City project, a large residential compound in Bucurestii Noi area, in sector 1, just two minutes from the metro. This is a developing area, in which we believe very much.
We are talking about a project consisting of five blocks, which includes, among many other facilities, over 700 apartments, over 900 parking spaces and 4,000 sqm of green spaces. It is, at the same time, the largest large-scale project approved after the entry into force of the nZEB (Nearly Zero Energy Buildings) regulations. It will be built in a single phase, the completion being set for fourth quarter of 2025.
During this period, most of our attention is focused on the progress of the project and on maintaining the level of quality that our clients have become accustomed to. As in our previous projects, the completion of the construction will be done within the time frame promised to the clients, knowing that speed, efficiency, and quality are attributes that Akcent Development has accustomed its public to, regardless of whether we are talking about office or residential buildings.
We are set to remain focused on our objectives, to try to authorize as many plots of land as possible, to look for new opportunities and most importantly to convey to our old and new clients that Akcent is a reliable partner.
