During the pandemic, and especially after the lockdown, there was a lot of talk about buying bigger houses or apartments. It was a trend that arose from the need to be the master of the outdoor space when there were movement restrictions, and also because the office in steel spikes moved into the living room. It was a period when the number of homes built as well as sold reached new records.

Gradually, the economic landscape began to deteriorate, and we all felt the sharp rise in energy, commodity and food prices. The keywords that ruled the last two years were “inflation” and “war”. And hence the cascade of effects that also resonate in the real estate market.

A drop in the threshold at which 5% VAT applies to new home purchases from €140,000 to €120,000 has dashed dreams of a bigger home this year.

And since they have a hole of billions of lei to cover in the state budget, the governors are now for the second time meeting VAT on housing. It rises to 9% from January 1, 2024, ending the 5% era that supported the market for 15 years. Housing prices will automatically increase.

Bucharest’s housing market is going through a temporary slump, says Tinu Sebeşanu, CEO of developer Impact, but when interest rates return to affordable levels, buyers are expected to turn their attention back to buying new homes.

Read in full at Panorama.ro