Bucharest, the capital of Romania, stands out as one of the European cities with the lowest housing prices and the highest affordability levels, according to a report by real estate consultancy Cushman & Wakefield Echinox.
Positive Economic Outlook Drives Price Projections
While Bucharest currently boasts attractive housing prices, the report anticipates an upward trend in the near future. This is fueled by projected salary increases stemming from positive economic developments and the easing of financing conditions. The price growth is expected to become more pronounced starting next year.
Affordability Comparison
Cushman & Wakefield Echinox's data reveals that purchasing a 70-square-meter apartment in Bucharest requires an average of 96.2 net monthly salaries. This places the city among the most affordable in Europe, both nationally and continentally. Only Brussels and Sofia (with 84.2 and 94.3 net monthly salaries, respectively) exhibit higher affordability levels among major European cities and capitals.
Contrasting with Expensive European Cities
In stark contrast to Bucharest's affordability, cities like London, Munich, Paris, and Zurich see average prices per square meter exceeding €10,000 (Paris) or even €16,000 (Zurich). In these cases, acquiring a similar apartment can demand over 200 net monthly salaries, more than double the cost in Bucharest.
Favorable Position in the Region
Bucharest's housing prices remain advantageous within the region as well. Lower affordability levels are observed in Prague (€4,700+ per square meter on average, requiring 196.7 net monthly salaries), Bratislava (171.5 salaries), Warsaw (165.3), Belgrade (161), Cluj-Napoca (158.2), and Budapest (150).
Bucharest's Residential Market Dynamics
Vlad Săftoiu, Head of Research at Cushman & Wakefield Echinox, comments: "Residential property prices in Romania have registered significant increases in the past year, particularly in cities like Cluj-Napoca, Brasov, Oradea, Iasi, and Craiova, with growth exceeding 10% in most cases. Bucharest, however, has shown a somewhat different trend in the past 12-24 months, with asking prices rising at a rate much lower than inflation and significant construction cost increases."
Market Recovery and Mortgage Interest Rates
Săftoiu further notes: "Following a first half of the previous year when the number of residential unit transactions dropped considerably due to rising mortgage interest rates, we witnessed a clear rebound in the second half of 2023 and the first few months of this year. Banks have launched a series of promotions with significantly more favorable interest rates,lower than the 7% reference rate set by the National Bank, to rekindle mortgage lending."
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