Transylvania residential market sets new records, growth rates up to 95 percent

The residential market from Transylvania is going through its best moment from the last three decades, with record deliveries, an increase in the number of closed transactions and prices which register a positive evolution compared to 2019, according to a report issued by real estate consultant SVN Romania.

Thus, Cluj – Napoca, Sibiu and Oradea, the biggest three regional residential markets from Transylvania, registered in 2019 new absolute delivery records, according to SVN Romania’s calculation based on data from the National Institute of Statistics (NIS).

Cluj – Napoca remained the most important regional residential market from Romania, after Bucharest – Ilfov region. 7,557 new homes were delivered in 2019 in the city and its surroundings, up 6% compared to previous year, thus setting a new record. Over 55% of them are part of residential projects located within the administrative limits of the city.

Cluj – Napoca has surpassed its suburbs in terms of residential projects under development, especially from 2015 – 2016, thus marking a new development cycle. However, the neighbouring localities attracted in the last three years the delivery of 8,000 new units, Floresti, the biggest suburb of Romania, attracting last year the delivery of almost 2,600 new homes – a level that is lower compared with the one registered in 2008 – 2009, when almost 4,000 new homes were delivered annually in Floresti.

”Cluj – Napoca’s residential market withstood relatively well the shock caused by the health crisis we are going through. The city continues to develop on the economic level and projects carried out thoroughly, with well-developed business plans, still record satisfactory results, although there are, of course, also projects with poor results. Demand returned to levels similar with the ones recorded last year and prices are, on average, almost 10% higher compared to last year”, stated Anamaria Burca, managing partner SVN Transylvania.

Real estate transactions closed in Cluj in the first seven months from 2020 grew by 25.5% compared with the same period from 2019, according to official statistics from the National Agency for Cadastre and Real Estate Advertising (ACREA), despite the two months of circulations restrictions during the National State of Emergency.

Sibiu, the second residential market from Transylvania and the fifth at a national level, with overall home deliveries in the last 13 years which are higher with the levels registered in Iasi or Brasov, registered also new records in 2019. Thus, SVN Romania’s calculations show that almost 2,700 dwellings were delivered last year in the city and its surroundings, up 18.2% compared to previous year.

As a peculiarity, Sibiu is the only significant regional market in which the number of homes delivered within the city is constantly exceeded by the one in the suburbs, Selimbar and Cisnadie attracting each every year the delivery of approximately 1,000 dwellings.

The number of closed transactions in Sibiu in the first seven months from 2020 increased by 24.5% compared with the first seven months of 2019, according to ACREA data. In this context, absorption rates remained at a satisfactory level, the soundness of the projects being the main differentiator in terms of registered results.

The most spectacular evolution was registered by Oradea, there the level of housing units delivered in 2019 almost doubled compared to previous year, to 2,161 new homes, according to SVN Romania’s calculations. The doubling in the number of new constructed homes came in a context in which Oradea is registering for several years good economic results, both on the industrial and tourism segments, while the capital inflows from emigrated locals remained high.

”Oradea’s residential market is in a full development stage, with more and more residential projects under development. Demand exists and if you have a well-designed project you will record satisfactory results, the absorption rates being of over 70% during construction phases. The city is strongly developing on the industrial segment and is also transforming into a important tourist attraction worthy of consideration, the general perspectives being of continuously growth on medium and long term”, added Anamaria Burca.

Taking into consideration the smaller size of Oradea’s residential market, compared to other important regional markets, the number of closed transactions is significantly influenced from a month to another by the delivery of certain phases or residential projects. Thus, in the first seven months from 2020 was registered a decrease of 5.7% in the number of closed transaction in Bihor, compared to same period from 2019.

Alba Iulia si Targu Mures represent the only two other cities from Transylvania in which 500 to 1,000 new homes are delivered annually. Alba Iulia registered the most significant development in 2019, with a 85% increase in the number of new homes, thus setting a new local record.

SVN Romania is one of the biggest local real estate consultants. The company has also two regional offices, in Brasov and Cluj – Napoca and is one of the main players on the property management segment through SVN Romania | Property Management & REO Services and on the financing segment, through (SVN Romania | Credit & Financial Solutions. SVN International Corp. has over 200 offices in eight countries and regions, with over 1,600 consultants and staff.