15.02.2024

Bucharest Real Estate Club surveyed the most dynamic investors for the forces that shape the city skyline in 2024. Urban freeze, along with the unpredictability show their effects: investments intend for Bucharest drops by more than 50% from 2023, BREC members indicating a volume between 400 – 500 million EUR for 2024.
On a scale of 1-5, the community expresses a moderate take on the economic perspectives of the Bucharest real estate landscape in the new year, with a 3.06 average, down from 3.6 in our 2023 survey, and a median of 3. The most interesting change by comparison to 2023 is that the development strategy and refurbishment of existing assets overtake new acquisitions.
Through the survey, the recurring theme is still the urban planning freeze. Most of our respondents circle back to the topic when estimating their investment pipeline. The urban planning uncertainty has also an impact quality-wise, as the responsible developers, who are building large-scale projects and have high-quality standards, are slowly but surely driven away from the market. Due to limited supply, there is an estimation of 10% in asking prices and rents.
The fiscal changes, including the increase of VAT for residential purchases and the termination of industry incentives for construction labour tax, along with high-interest rates, impact negatively the accessibility of credit and housing. However, the biggest contributor to investor sentiment towards the Bucharest real estate market is the urbanistic uncertainty.
The attractiveness of asset classes changed by comparison to 2023. Industrial & logistics still tops the charts, closely followed by residential, a segment lower ranked 12 months ago. Offices lost further ground. However, hotels are the least preferred in 2024. In 2023 this asset type was slightly higher in the top, which is surprising considering the increase in the number of visitors.
Despina Ponomarenco, President of BREC: “If Romania continues infrastructure investments and in the context of Schengen accession, we are facing an accelerated development outlook. The national GDP is estimated at 310 billion $ for 2024 and 323 billion $ for 2025. The country has a gross debt of 52.7% of the GDP, well below the EU average of 83%.The GDP of Bucharest only exceeds the GDP of countries such as Croatia or Bulgaria. In this respect, we hope that 2024 will bring improvement perspectives for the relation between real estate investors and the representatives of local authorities for the responsible development of Romania’s Capital City“.