Nearly 2,000 residential complexes are currently under construction
Almost 2,000 residential complexes are currently under construction, and three quarters (76%) of real estate projects in Romania have a maximum height of 4 floors.
"More than half of the real estate investments in Romania (57%) are in the pre-construction phase - obtaining building permits - one month after the start of the war in Ukraine", according to an analysis by IBC Focus.
The company's representatives say that there are big question marks related to inflation, the price of construction materials, as well as the effects of rising credit prices in Romania, so it remains to be seen what the evolution of the construction market will be, given that most residential investments will it starts in 2023 or at the latest in 2024.
Thus, almost 2,000 projects are currently under construction, representing 28% of the analyzed projects. The company analyzed the construction market of new residential complexes to capture the main market trends. The analysis includes 6,403 construction sites representing the construction of blocks of flats and residential complexes.
Three quarters (76%) of real estate projects in Romania have a maximum height of 4 floors. They are even easier to build and do not involve the complexity of multi-level buildings. Another explanation is that in many urban areas these investments are even easier for developers to authorize.
At the country level, IBC Focus has identified 439 residential projects with a minimum of 10 floors. Top 5 cities in which the tallest residential buildings are built are Bucharest (175 projects) Constanta (42 projects), Brasov (35 projects), Iasi (33 projects), Timisoara (27 projects).
"It is interesting that the city of Cluj does not position itself in this top, although it appears on the first position in the ranking of the most expensive apartments in Romania. The expectation is that there will be more high-rise residential projects in this city in order to optimize the real estate investment by the investors ", the company shows.
Thus, the year 2022 remains uncertain in the area of residential investments considering the fact that there are many projects in the authorization phase that are about to start. However, an optimistic argument is that 13% of new assemblies under construction are sold out before they are completed. For example, 33% of real estate units under construction in Cluj are sold out.
"We noticed the tendency and the preference to introduce in the offer of the developers the possibility to have penthouses. The correlation comes from the fact that 14% of the total analyzed projects are provided with a secluded floor. This allows developers to make the most of the height allowed but also the possibility to offer customers penthouse-type housing that generally offers access to the terrace", says Andrei Spataru, CEO and founder of IBC Focus.
In addition to the effects of the war in Ukraine, which could influence the demand for new housing, the biggest problem for real estate developers is related to the predictability of construction costs, given that rising prices for construction materials and labor, doubled by rising architectural tariffs, investors and builders are in trouble, he says.
There is also a barrier in the legislative field: obtaining building permits and, depending on the area, certain restrictions that are increasingly imposed by the authorities.
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