The demand for new residential units is rebounding

The demand for new residential units is rebounding

The demand for new residential units is rebounding 936 516 BUCHAREST REAL ESTATE CLUB


The demand for new apartments in Bucharest registered a 46% increase in the second quarter of the current year compared to the same period of the last year, while the supply has a minus of 26%, as shown by the analysis presented at Residential Conference – The Future of Quality Living organized by BUCHAREST REAL ESTATE CLUB (BREC) this week in Bucharest.

The data show increases in demand in every area of Bucharest, starting from 11% for the West area, up to 54% for the North area.

The offer is decreasing: -44% in the North, -31% in the East, -22% in the West and -16% in the Center. Only the southern area has an increase of 6% for the supply of new apartments. Prices register decreases of 2% in the West, 3% in the East, 4% in the Center and 9% in the South. The North is the only area where prices increased with 7%.

“At the level of the Bucharest market, demand has recovered from last year’s dramatic drop, from the second quarter. At that time the outlook was bleak: war on our border, galloping inflation, rising interest rates, rising prices. However, the market has shown maturity and resilience, and even if we have not yet exited the risk zone, we have reasons to look with some optimism at the next period. We hope that the impact of the new fiscal changes will not be likely to affect the course of the market, and if this is the case, then we will be able to see a beneficial 2024 for the residential market”, says Dan Niculae, Managing Director, Finance.

In the context of the VAT increase from 5 to 9%, the elimination of facilities for the construction industry as well as the increase of the minimum wage for this field, the medium and long-term forecast is of an increase in housing prices.

“The data presented show a clear decrease in supply of 26% in Q2 2023 compared to Q2 2022 and 12% in Q2 2023 compared to Q1 2023. The difficulty of authorizing new projects, given the urban gridlock in Bucharest, will cause a sharp decrease in the supply of new homes and price pressure”, says Despina Ponomarenco, BREC President.

The new unit rental segment saw significant demand growth of 63% YOY and 17% compared to Q1 2023. Broken down by area, the increase in demand for new apartments for rent starts from 49% to 71% in Bucharest.