Romania remains one of Europe's most affordable countries for new housing, ranking third after Bosnia and Herzegovina and Greece, according to the Deloitte Property Index. In 2023, the average price for new housing in Romania rose slightly to USD 1.64 per square meter, yet it remains significantly cheaper compared to countries like Austria. On average, Romanians need 5.9 years' worth of gross income to buy a 70-square-meter home, showing an improvement in affordability. Despite higher construction and mortgage costs due to rising interest rates, recent rate cuts by central banks may boost real estate investments and mortgage lending in Romania.
Romania continues to be among Europe's most cost-effective countries for new housing, securing the third position behind Bosnia and Herzegovina and Greece, as per the latest Deloitte Property Index. This index, now in its 13th edition, provides a detailed analysis of the residential real estate market across 24 countries and 69 cities. In 2023, the average price for new housing in Romania rose slightly to USD 1.64 per square meter, up from USD 1.60 per square meter in 2022. Despite this increase, Romania's housing market remains notably more affordable compared to countries like Austria, where the average price for new housing leads at USD 5.37 per square meter.
This affordability is also evident in the number of gross annual salaries required to purchase a new 70-square-meter home. In 2023, the average Romanian needed 5.9 years' worth of gross income, an improvement from 6.3 years in 2022. Romania ranks as the fourth most affordable housing market, following Denmark, Norway, and Italy. On the other hand, the least affordable housing markets in Europe are in the Czech Republic and Slovakia, where buyers need 13.3 and 12.7 years' worth of gross income, respectively, to afford a similar property.
Irina Dimitriu, Partner at Reff & Associates Deloitte Legal and Real Estate Industry Leader at Deloitte Romania, commented on the market trends, noting that high interest rates continued to influence the Romanian residential real estate market in 2023. These rates drove up construction costs for developers, resulting in higher prices and mortgage rates for buyers. However, recent actions by the European Central Bank and the National Bank of Romania to reduce interest rates as inflationary pressures subside could stimulate real estate investments and enhance mortgage lending.
In conclusion, Romania remains one of Europe's most affordable countries for new housing, ranking third after Bosnia and Herzegovina and Greece. Despite a slight increase in average housing prices to USD 1.64 per square meter in 2023, it remains significantly cheaper than markets like Austria. The affordability of housing has improved, with Romanians now needing 5.9 years' worth of gross income to buy a 70-square-meter home. The recent reduction in interest rates by central banks may further boost real estate investments and mortgage lending in Romania, potentially offsetting past challenges related to high construction and mortgage costs.
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