Romania has remained one of the most affordable property markets in Central and Eastern Europe (CEE), with housing prices growing slower than income levels. This trend is in contrast to neighboring countries like Poland, the Czech Republic, and Hungary, which saw significant increases in both property prices and rents, according to Colliers' latest analysis.

In Bucharest, house prices have increased by approximately 50% over the past five years, while Cluj-Napoca has seen an 80% rise. By comparison, most major cities in the region have reported increases of 80% to 100% during the same period.

"While overall housing affordability in Romania appears favorable, there are notable differences across market segments. New homes in desirable areas are often beyond the reach of average wage earners. When factoring in financing costs, affordability decreases further due to high interest rates. Moreover, the gap between the cost of renting and owning has become increasingly evident, with renting often proving to be the more economical choice," commented Gabriel Blăniță, Director & Advisory Services la Colliers România.

"In Bucharest, the average rent represents around 45% of a monthly salary, significantly lower than in other capitals in the region, such as Warsaw or Bratislava, where it approaches 70%. This makes renting a more affordable option than buying, particularly in the context of mortgage rates that far exceed rental costs for similar apartments," he added.

The residential rental market in Romania has gained considerable traction in recent years. Developers and investors are increasingly attracted by the relative affordability of rents and the potential for rising property values, a trend supported by the rapid economic growth of major cities like Bucharest, according to Colliers. The local market evolution aligns with patterns seen in comparable cities such as Prague and Warsaw.

However, according to the same report, Romania remains one of the countries with the lowest mortgage penetration rates in the European Union - less than 2% of the total housing stock, compared to 15% in Hungary, 14% in Poland, and 26% in the Czech Republic. Limited access to financing has slowed the pace of new housing developments. Nevertheless, investment in the rental sector provides a sustainable, long-term solution to meet housing demand.

"The residential market in Romania continues to grow steadily, marked by affordability and dynamism despite the challenges facing the CEE-6 region. Investments in the rental sector and the development of mixed-use projects present significant long-term opportunities, further solidifying Romania's position as an appealing destination for international investors," reads the Colliers press release.

irina.marica@romania-insider.com

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