Romania remains one of the most affordable property markets in CEE, with house prices growing slower than income levels: Colliers

Rising average incomes outpacing price growth has improved housing affordability in Romania, setting it apart from other Central and Eastern European (CEE) countries such as Poland, the Czech Republic, and Hungary, where prices and rents have experienced significant increases, according to the latest analysis by Colliers. In Bucharest, house prices have increased by approximately 50 percent over the past five years, while Cluj-Napoca has seen an 80 percent rise. By comparison, most major cities in the region have reported increases of 80 percent to 100 percent during the same period.

“While overall housing affordability in Romania appears favorable, there are notable differences across market segments. New homes in desirable areas are often beyond the reach of average wage earners. When factoring in financing costs, affordability decreases further due to high interest rates. Moreover, the gap between the cost of renting and owning has become increasingly evident, with renting often proving to be the more economical choice. In Bucharest, the average rent represents around 45% of a monthly salary, significantly lower than in other capitals in the region, such as Warsaw or Bratislava, where it approaches 70%. This makes renting a more affordable option than buying, particularly in the context of mortgage rates that far exceed rental costs for similar apartments”, explains Gabriel Blăniță, Director & Advisory Services at Colliers România.

In recent years, the residential rental segment has gained significant traction in Romania. Developers and investors are drawn to the potential for rising property values and the relative affordability of rents, according to Colliers consultants. This trend is further supported by the rapid economic growth of major cities like Bucharest and aligns with recent developments in comparable markets such as Prague and Warsaw.

However, Romania remains one of the countries with the lowest mortgage penetration rates in the European Union – less than 2 percent of the total housing stock, compared to 15 percent in Hungary, 14 percent in Poland, and 26 percent in the Czech Republic. Limited access to financing has slowed the pace of new housing developments. Nevertheless, investment in the rental sector provides a sustainable, long-term solution to meet housing demand.

“The prospect of rising property prices, combined with the advantages of the rental market, is driving a paradigm shift in the real estate sector. Residential rental projects are becoming increasingly appealing to investors due to their stability and long-term returns. The economic growth of Romania’s major cities, particularly Bucharest, plays a key role in fueling this interest”, adds Gabriel Blăniță.

The residential market in Romania continues to grow steadily, marked by affordability and dynamism despite the challenges facing the CEE-6 region. Investments in the rental sector and the development of mixed-use projects present significant long-term opportunities, further solidifying Romania’s position as an appealing destination for international investors.