The delivery of new homes fell by 15% nationwide and by more than 20% in Bucharest, while demand increased by 7% in 2024, according to Colliers’ annual report. Difficult access to financing and rising construction costs are slowing future developments, exacerbating the housing shortage. Meanwhile, prices continue to outpace inflation, making homeownership increasingly unaffordable in major cities. In 2025, limited supply and strong demand will keep upward pressure on prices. Against this backdrop, the rental market is gaining momentum, emerging as an attractive alternative for those unable or unwilling to buy a home under current conditions.
“Although housing deliveries remain above the decade’s average, the gap between supply and demand is becoming increasingly evident. In previous years, a larger number of homes were authorized and built, but over the past two years, approved construction areas have declined significantly, signaling a notable drop in future housing deliveries. Bucharest is feeling this shift the most, with high demand but limited new developments, constrained by land scarcity, strict regulations, and rising construction costs. In 2024, housing demand rose by 7% compared to the previous year, according to the local land registry agency. Market dynamics vary by city. In Bucharest, apartment transactions increased by 5%, while Cluj and Timișoara saw gains of 3-4%. Iași experienced the highest growth, up 40%, driven by a surge in newly delivered homes, attracting a growing number of buyers”, explains Gabriel Blăniță, Director & Advisory Services at Colliers România.
At a national level, nearly 170,000 apartment transactions were recorded, including both new and existing units. While this is below the record set in 2021, it is still more than 40 per cent higher than the 2018-2019 average. Colliers consultants note that market trends varied throughout the year. The first half of 2024 saw strong transaction activity, but growth slowed in the second half, particularly in December. Uncertainty surrounding the 2025 budget and the postponement of the presidential election led many buyers to adopt a more cautious approach. This uncertainty was most pronounced in the mid-market and premium segments, where purchases involve higher amounts and stricter financing conditions.
According to the latest data from the National Statistics Institute, residential construction slowed by around 22% throughout 2024. One of the main factors affecting the market was limited access to finance. Although the National Bank reduced the monetary policy rate to 6.5%, the IRCC index remained high at around 6% due to its delayed calculation method, which does not immediately reflect market fluctuations. Although banks continued to offer more attractive fixed-rate mortgages, the high cost of borrowing discouraged many buyers, resulting in a slower pace of mortgage-financed transactions than in previous years.
“Access to finance remained a challenge, but wage growth above inflation helped to maintain housing affordability. Unlike other markets in the region, where prices and rents have risen significantly faster than incomes, Romania has experienced a more balanced evolution. However, 2024 was a transitional year marked by moderate sales and economic factors affecting access to credit. In this context, house prices continued to rise, driven by limited supply and local market dynamics. At the national level, prices increased above the rate of inflation (5.1% at the end of the year), but at a slower pace than wages (+13.1% annually). As a result, while housing became moderately more expensive, overall affordability remained relatively stable”, notes Gabriel Blăniță.
In major cities, purchasing a home has become increasingly expensive, especially in central areas where demand is high and supply is limited. However, in metropolitan and suburban areas, where land is more available and construction costs are lower, the housing supply could expand, helping to balance the market. In cities with limited housing stock and strong demand, prices have risen significantly, Colliers consultants highlight. Bucharest, Cluj-Napoca, and Iași recorded price increases above the national average, driven by insufficient new deliveries. In contrast, in areas with greater competition among developers or lower demand, slight price adjustments have been observed, though they do not indicate a broader market decline.
Barring a major economic crisis, the housing market is expected to continue on its current trajectory in 2025, according to Colliers consultants. Demand is likely to remain strong, driven by rising wages, lower interest rates and a growing need for housing – particularly in Bucharest and other major cities – fuelled by both immigration and internal migration. Meanwhile, supply is expected to continue to decline, especially in the major cities, due to bureaucratic hurdles and developers’ reluctance to launch new projects. With fewer new homes and stable or rising demand, price pressures will persist. This will make housing even more unaffordable, especially in central and well-connected areas where prices are already high relative to average incomes.
In this context, the rental market is growing rapidly, attracting more investors looking for long-term stable income. In Bucharest, this segment is following the trends seen in the more developed Central and Eastern European markets, becoming an increasingly viable option for those who cannot or do not wish to buy a home. In the long term, population growth – concentrated in the major cities – will continue to drive high demand in the residential market, Colliers consultants point out. With one of the highest overcrowding rates in the EU, Romania faces an ongoing housing shortage, making access to housing a priority regardless of economic conditions.
“Infrastructure development will have a significant impact on the property market, driving demand for residential, commercial and logistics projects. However, this growth also presents complex legislative challenges, from land acquisition and expropriation procedures to strict urban planning regulations and compliance with new ESG standards. To ensure sustainable and efficient investments, developers must align their projects with local urban planning strategies and carefully navigate the regulatory framework”, says Oana Bădărău, Partner & Head of Real Estate at law firm PeliPartners.
