The number of construction permits issued for residential buildings in Bucharest has significantly decreased, with the first nine months of 2024 showing a 45% drop compared to the same period of 2021, according to a recent market report by real estate consultant SVN Romania. In the first three quarters of 2024, only 272 construction permits were issued, marking a 4.2% decrease year-over-year and a sharp decline from 496 in 2021.

For further comparison, 366 permits were issued in the first nine months of 2022.

At the same time, the decrease in the total usable area authorised for construction in residential buildings in Bucharest is even more accentuated: the first nine months of 2024 brought a decline of 62% compared to the level registered in the first nine months of 2021, as revealed by the “SVN Romania Residential Market Drive” report.

“This drop registered in recent years already has a visible effect: the number of new homes delivered in Bucharest and its surroundings is at its lowest half-yearly level in the last five years, in a context in which home sales increased according to the official statistics. The current situation will continue in the coming years, which will translate into higher prices and reduced accessibility,” commented Andrei Sarbu, CEO of SVN Romania.

He also expressed concern about the broader economic implications of this urban planning gridlock. He highlighted that, beyond residential developments, office buildings and other commercial projects are also being delayed, resulting in potentially increased costs for businesses and limiting opportunities for company expansion.

Another effect is the redirection of some developers’ attention towards Bucharest’s limitrophe areas. In fact, 2023 brought a premiere from this point of view, SVN said, as Ilfov county surpassed Bucharest for the first time in terms of the total usable area authorised for construction in residential buildings, according to the data of the National Institute of Statistics. This situation was also recorded in 2024.

Roughly 23% fewer new homes were delivered in Bucharest and its surroundings in the first half of 2024 compared with the first half of 2023. SVN Romania estimated in its spring report that 2024 could bring the lowest number of home deliveries registered in the last five years.

Meanwhile, almost 41,400 homes were sold in Bucharest in the first 10 months of 2024, up 11.3% compared to the first 10 months of 2023, according to the data of the National Agency for Cadastre and Land Registration. At the same time, the number of residential transactions closed in the Bucharest – Ilfov region was 14.3% higher in the same period.

SVN Romania is one of the leading real estate consultancy firms in Romania, having traded over 10,000 dwellings valued at more than EUR 800 million in its first five years. With a presence in eight countries, SVN International Corp. operates more than 200 offices globally, employing over 2,200 real estate consultants and staff.

irina.marica@romania-insider.com

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