Real estate sales in Cluj plummeted in early 2023. A sign of change in buyers' behaviors?
Cluj-Napoca recorded a major drop in real estate transactions in January 2023. As shown in data compiled by Blitz, a nationwide real-estate agency, the city has seen a 57.76% decrease compared to the same month of last year.
While January isn't the most popular month to purchase a property, the difference is way too high. There were only 1,064 property sales recorded in that month, compared to January 2022's figure of 1,935. Usually, up to 4,000 transactions would take place in the city during peak months and buyers would decide after just 5 to 6 viewings.
"Real estate buyers at the beginning of 2023 place a greater emphasis on quality, because money is harder to obtain, rates are higher, and the purchase decision is made after several stages and taking into account several factors," says the agency.
The economic impact of the pandemic and the war outbreak in Ukraine has somewhat shifted the paradigm among customers. Now, people are more cautious and decide only after 10-12 viewings on average.
Throughout the years, the city has seen an enormous number of newcomers from other Romanian cities and foreign settlers coming mainly from Western Europe and other parts of the world. Often dubbed as the 'Silicon Valley of Romania,' Cluj attracts plenty of IT workers and investors, and their arrivals have also caused a staggering increase in the real estate market and made it harder for locals to purchase or rent a property. Some are also forced to retreat to nearby communes, like Florești, Baciu, Borhanci, and Dezmir.
Aaron Roberts, a British expat who's lived in Romania for a decade, broke down his tips with Romania Insider on renting apartments in Cluj-Napoca. He runs ClujXYZ, a one-stop information site about the city in English, and the Foreign Students of Cluj-Napoca Facebook group.
"An inside city center apartment shouldn’t cost over EUR 13 per sqm and an outside city center apartment should be somewhere between EUR 4,5 to 6,6 per sqm," he mentioned.
However, experts are predicting that the climate for real estate sales and rentals is slowly going back to the pre-pandemic level, especially in big cities like Cluj-Napoca and Bucharest. The prices of sales went down by 4,58% and 1.06% in January 2023 and by 1.29% and 2.74% in the month after, and rents are expected to follow the trend.
"This is why I have a range per sqm for outside the city center with EUR 5.5/sqm for "entry-level quality" - which is furniture purchased within the last 10 years and in decent condition, double-glazed windows (thermopane), central heating (central), standard kitchen (clean, renovated within 10 years and with major utilities). That would mean that an apartment with "2 rooms" and 60 sqm should be around EUR 330/month (approx. 40% of the average net income in Romania)," Aaron Roberts said.
(Photo source: Emil Boc/Facebook)
