Housing is less affordable to Romanians due to the high cost of loans

Transactions of apartments and houses began to decline starting from the spring of this year, as a result of high energy costs, rising construction materials and fuel prices, in addition to the rising costs associated with mortgages, Colliers consultants point out.

Specifically, the total stock of home loans has reduced its annual growth rate to 10% at the end of July, after annual growth at the end of 2021 stood at 13%.

In Bucharest, owners took on bank debt for 50% of the apartments traded in the first six months of this year. Overall in 2021, 60% of apartments were bought on loan.

In the rest of the country, 44% of transactions were made with credit in the first half of the year, a percentage slightly down from the level of 45% recorded for the whole year 2021.

Cluj is at the top in terms of the decrease in the number of those who take out loans to buy homes, 48% of real estate transactions being concluded with borrowed money in the first half of the year, compared to 53% last year.

The Consumer Credit Reference Index (CCRI) allows the exact calculation for the last quarter of this year, when the interest rate will reach 4.06%, and estimates for the first quarter of next year place this indicator around 6%.

This evolution will impact the demand for credit and therefore housing sales, accelerating the trend of balancing supply and demand that we have started to see since the second quarter of this year.

Over 24,000 units are now under construction in Bucharest and its surroundings, about 7,000 units in Iasi and over 5,000 in Cluj Napoca.

Another market trend is the construction of residential complexes for rent only as the gap between mortgage and rent narrows, given that market prices rise and lending conditions tighten.

This demand has so far been met by small investors who bought packages of apartments and put them on the rental market, but now it is starting to gain the attention of big players as well.

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