Over 24,000 dwellings in construction in Bucharest and its surroundings
Over 24,000 new residential units are under construction in Bucharest and its surroundings, according to the market report ”Romania Residential Market Genome 2021” released by real estate consultant SVN Romania. Significant developments are being registered also in other residential regional markets from Romania, such as Constanta, Brasov or Cluj – Napoca.
Among the residential units under development in and around Bucharest, approximately 18,000 – 20,000 could be delivered this year. The result will depend on the degree to which developers will maintain their current pace of construction and the ease with which they will complete the delivery papers.
This volume of deliveries would be similar to the one registered in 2020, when a new record was established in Bucharest and its surrounding areas, despite the Covid-19 pandemic. Thus, 20,733 residential units were delivered in the region last year, up 40% compared to 2019, according to data from National Institute of Statisics.
”The overall difficult context we are passing had a limited impact on the local residential market, which withstood well the shock caused by the macroeconomic effects of the Covid-19 pandemic. Significant increases in closed transactions were registered in all regional residential markets from Romania, new records in deliveries were registered in Bucharest and the accessibility of purchasing a new home reached its best level in recent history. Today we are in a in a far better point compared with the one from March 2020, when the current sanitary crisis started. Therefore, 2021 has the premises for new good results”, stated Andrei Sarbu, CEO SVN Romania
The new housing offer from 2021 will register insignificant changes compared to 2020. Thus, the largest share of units due to be delivered this year in Bucharest and its surroundings, approximately 55.2%, targets the mass market segment. This segment is characterized by locations within the large neighbourhoods or the outskirts of the city and trading prices which go up to EUR 1,300 per net square meter.
Approximately 8,3000 new residential units due to be delivered in 2021 target the middle market segment, the figure being similar with the one from 2020. Trading prices of these units start usually from EUR 1,300 and go up until EUR 2,000 per net square meter, for the most expensive ones.
The middle market segment will thus continue to attract an important number of deliveries, in a context in which wages continued to increase in recent last years. At the same time, the demand for homes with a god location, such as the centre of large neighbourhoods or semi-central and the northern areas of the city, continued to increase. In general, these units have bigger than average surfaces and benefit from a good level of finishing.
The premium and luxury segment is due to register in 2021 its best results, with an estimated volume of 700 units due to be delivered. Usually, premium and luxury units are located in the northern part of the city and have trading prices which start from EUR 2,000 per net square meter. Overall, the premium and luxury market from Bucharest has a yearly value of EUR 250 million according to SVN Romania estimates.
The accessibility of purchasing a new home in Bucharest reached at the beginning of 2021 its best level in the modern history. Thus, today is for times more accessible to purchase a new home in Bucharest, according to the profile index calculated by SVN Romania.
Thus, in January 2021 were need 99.6 net medium wages at a national level for purchasing a one-bedroom new apartment in Bucharest (50 square meters new surface), or a period of 8.3 years, compared to 102 medium wages (8.5 years) in March 2020, when the Covid-19 pandemic broke out in Romania.
In January 2019 were necessary 107 medium wages (or a period of 8.9 years), while in January 2018 were necessary 117.6 medium wages (or a period of 9.8 years) for purchasing the same apartments. At the same, at the peak moment registered in 2008, were necessary no less than 393.6 medium wages, or o period of almost 33 years. Please note that the medium wage in Bucharest is approximately one third higher compared with the national medium wage. (source: SVN Romania)
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