The residential market in Bucharest and Ilfov county saw an increase of 35% in the number of transactions for the first quarter of 2021, compared to the same period of last year, according to the National Cadastral Agency (NCA).
“This result is exceptional,” Gabriel Voicu, Vice President of SVN Romania said during CEDER 2021. He added that last year there was also a 44% increase in the number of transactions, compared to 2019.
At the country level, the NCA reported an increase of 21% in the number of transactions for Q1 this year.
Voicu believes there are four factors leading to this situation: affordability, a record number of deliveries, high demand and the impact of the loan interest on a buyer’s salary.
“Someone with a medium salary can currently buy a two-room apartment of 50 sq m over 8.3 years. Three years ago they needed 10 years, while in 2008 it was 32 years. This shows the medium wage went up more than apartment prices,” Voicu said.
Secondly, the last couple of years have seen record deliveries of home units. “In 2020 there were 20,000 new units delivered in Bucharest and Ilfov, while in 2019 there were 14,000 units, so there was a huge increase,” Voicu added.
Meanwhile, demand remains high and the impact of mortgage interest on a medium salary has reduced.
Taking for instance a 25-year loan, the impact on the salary is now 46%, compared to 60% in January 2019, according to the calculations of SVN Romania.
Plus, as Gabriel Voicu pointed out, this year “we’ve seen only a 5% increase in prices compared to last year.”
Bogdan Iliescu, Associate Director at Crosspoint, confirms the positive trend.
“Despite Covid-19, the residential sector performed well in 2020 and the trend continues this year. The pandemic came with a shift in the mentality of the developers, who started to look more carefully at the needs of the customers. They came with better projects. Now it’s not all about the square meters and the price, but about what the project offers, which is a sign of market maturity,” Iliescu concluded.
