Trend: house prices up 1.66% y-o-y in Q2 2018

The average selling price of apartments in Romania rose by just 1.66% during the year to Q2 2018, down from y-o-y rises of 4.71% in Q1 2018, 7.3% in Q4 2017, 9.36% in Q3, 8.87% in Q2 and 7.61% in Q1. Romanian house prices actually dropped 1.02% q-o-q during the latest quarter.

House price growth averaged 8.7% annually from 2015 to 2017. Romania's strong performance over the past three years is a rebound from previous dramatic falls. House prices plunged by 24.22% in 2009, 22.08% in 2010, 6.99% in 2011, 5.96% in 2012, 10.43% in 2013, and 1.59% in 2014. It was only in 2015 that the housing market began to recover. 

Analysis: Residential demand slowing

Demand for housing, especially in Romania’s six largest cities, rose strongly by about 5% to 10% in 2017 from a year earlier, according to local real estate experts. However in Q2 2018, demand for residential properties in the country’s main cities dropped 5% from a year earlier, with the biggest declines recorded in Constanta (-15%), Bucharest (-8%) and Brasov (-4%), according to real estate portal imobiliare.ro.

Rents, rental yields: good yields at 6.07%

Bucharest apartment costs are low, at around €1,591 per sq. m.

Romania: city centre apartment, buying price, monthly rent (120 sq. m)
	Buying price	Rate per month	Yield
Bucharest	€ 190,920	€ 966	6.07%

Recent news: Romania’s economy expanded by 6.9% in 2017, the highest level since 2008, amidst strong private consumption, supported by indirect tax cuts and wage hikes. In Q2 2018, the economy grew by 4.1% year-on-year, slightly up from the previous quarter’s 4% growth but down from last year’s 6.1% expansion, according to the country’s National Institute of Statistics. Economic growth is projected at 4.1% this year and 3.8% in 2019, according to the European Commission.