According to the Deloitte Property Index 2022, conducted in 23 countries and 68 cities, Romania ranks second in the top European countries with the cheapest housing after Bosnia and Herzegovina, with an average price of €1,266/sq.m., calculated on the basis of data from the main cities and villages of the country. Compared to last year, the average price is 7.3% higher. Serbia (1,520 euros/sq.m.) and Portugal (1,537 euros/sq.m.)* were also included in the list of the continent’s countries with the lowest average prices. In the ranking of cities, Cluj-Napoca is the most expensive in our country with an average of 1,940 euros/sq.m., followed by Bucharest (1,573 euros/sq.m.) and Brasov (1,348 euros/sq.m.).

As for housing affordability in each country, calculated as an average number gross of the annual salary needed to purchase a standard home (70 square meters), Romania ranks seventh out of 19 countries for which this indicator was calculated. Thus, for such a purchase, a Romanian needs 6.3 annual salaries. According to the study, affordable housing is the most difficult in the Czech Republic, where housing requires 13.3 of the average annual gross salary, and the most affordable is in Ireland (3.1 of the average annual salary), Norway (4.4) and Belgium. (4.5).

“The real estate market is considered a barometer of the economy, which is influenced by several factors, such as the availability of land for real estate construction, the supply of raw materials and other products, the cost of construction, the energy market, etc., but also the purchasing power of the population and financing conditions. This year, an important factor will be the availability and cost of credit, which are strongly influenced by inflation. In 2021, the average annual interest rate for mortgage loans in lei fell below 4%, according to NBR data, but it is expected to rise starting this year amid general inflation. On the other hand, real estate investment is considered an asset class that protects the value of the investment over time,” said Alexandra Smedou, partner of Deloitte in Romania and leader of the real estate industry.

The United Kingdom tops the list of countries with the most expensive housing after an annual increase of almost 21%, with an average price of €4,905/sq.m. The second place is occupied by Austria with a lead of 7.3% with an average figure of 4,782 euros/sq.m. Prices above 4,000 euros/sq.m were also recorded in France (4,639 euros/sq.m) and Germany (4,600 euros/sq.m). On the opposite side with the cheapest housing among the countries for which national data are available are Bosnia and Herzegovina (€974/sq.m) and Romania (€1,266/sq.m).

In contrast, Hungary leads the price growth category with an annual advance of 21.5% in 2021 compared to 2020, followed by the UK (21%), Slovakia (19.5%) and the Czech Republic (18.4%). In general, house prices increased last year in 18 of the 21 countries for which this indicator was calculated. At the same time, price reductions were recorded in Spain (8.5%), Slovenia (3.8%) and Latvia (1.3%).

The ranking of European cities with the most expensive housing is headed by Paris with an average price of 13,462 euros/sq.m for an apartment, followed by Munich (10,500 euros/sq.m) and London (8,426 euros/sq.m). Among the cities where houses are more expensive than in the country’s capital are Barcelona in Spain (6,251 euros/sq.m), Antwerp in Belgium (4,050 euros/sq.m), Milan in Italy (3,844 euros/sq.m), Cluj-Napoca in Romania (1940 euros/sq.m).

“Romania is among the countries analyzed where housing prices in major cities exceed the national average, with Cluj-Napoca standing out by a difference of more than 50%, while in Bucharest they are only 25% higher. Thus, regional differences between the country also affect the real estate market, both at the level of transaction prices and in terms of investors’ appetite for residential projects. The Western region has a clear advantage from this point of view, and it is expected that urban concentration will also arise in other regions, with the modernization of infrastructure, which will contribute to economic development,” he said Marius Vasilescu, Director of Financial Consulting, Deloitte Romania.

The 11th edition of the Deloitte Property Index study analyzes the development of the residential real estate market in 23 countries and 68 European cities during 2021.

*the average national price per square meter for Bulgaria and Norway is not taken into account in the report