The total area of residential projects subject to construction permits issued in January-August in Romania decreased by 12.3% y/y to 2.23 million square meters (sqm), according to data published by the statistics office INS. 

The construction works volume on residential projects contracted by over 20% y/y in Romania during the first seven months of the year, which dragged down the performance of the entire sector despite mixed results in the non-residential building area and robust increase in the public-funded civil engineering segment.

The building permits data somehow invalidates the complaints expressed by the real estate developers, who accuse mayor Nicusor Dan of obstructing the residential development.

Some 2% more projects were approved in the ten months of this year, but their average size decreased to under 94 sqm per permit from 109 sqm in January-August 2023. This was not the case in Bucharest, where the average size of the approved projects soared from 87 sqm to 216 sqm, indicating that several large-sized projects received permits.

In Bucharest, against the general trend at the country level, the residential market, as measured by the number of new permits, remains active, with the total area of the projects approved surging by 164% y/y to 539,000 sqm (24% of the total surface of the projects approved in the entire country). Specifically, several large-sized projects were approved in April – with a combined surface of over 300,000 sqm (over 830 sqm per project).

In all the other regions of the country, however, the area of the projects approved in January-August decreased by different rates ranging from 3% y/y (south-west Oltenia) to 51% y/y (south-central Muntenia).

The second-largest region by residential development is the north-west (including the countries Cluj, Oradea, and Arad), where 19.2% of the total area subject to approval in January-August was concentrated. This was achieved despite a steep 23.4% y/y decline in the total residential area approved for construction in the first ten months of the year. 

iulian@romania-insider.com

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