When it comes to the real estate market, the situation is quite simple: everything isoverpriced. And if you’ve been thinking about buying an apartment in recent years, you’ve probably seen the price increases with your own eyes. By the end of 2025, price increases ranged from +6% (Hello, Cluj!), bringing the average price per square meter in Cluj-Napoca to around 3,230 euros/m², to +22% (Hello, Bucharest!), meaning a price of approximately 2,200 euros per square meter in the capital.
Nevertheless, we have learned that when discussing the economy, the truth becomes nuanced, depending on the types of figures we are looking at. For example, housing prices can benominal (lei/euro)—the prices listed in sales ads—or adjusted for inflation, allowing us to seethe actual increases. Welcome to a new edition ofTheMacRO Zone, where we’ll analyze the numerical difference between renting and buying, and how we compare to other European countries.
A DECADE IN WHICH THE PACE HAS PICKED UP
To begin with, let’s take a look at the European perspective, where, between 2015 and 2025, we’ve often heard that a trend is emerging in which our Western neighbors prefer to rent rather than buy a home. Even though this trend stems from a different social foundation than that of Romanians (after the communist era, the sense of ownership in our country developed so strongly that we became the country with the most homeowners in the EU— 94.3%), the choice of renting as a housing option was not a trend based solely on social factors, but also on economic ones.
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The underlying trend shows that homeownership has become increasingly difficult to achieve, not because demand has disappeared, but because real estate prices have risen at a faster rate. Simply put, homeownership has become less affordable, and our neighbors to the West have turned to alternatives.
QUARTERLY RATE OF INCREASE IN HOUSING PRICES AT THE EU LEVEL
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- As we can see, the rate of growth in housing prices across the EU pointed to a year of consolidation in 2025, rather than a further surge. Growth rates remained high, but toward the end of the year, there was a slight slowdown compared to the previous quarter.
- In Q4 2025, the highestannual increases in housing prices in the EU were recorded in Hungary (21.2%), Portugal (18.9%), and Croatia (16.1%).
- At the other end of the spectrum,the only annual decline was in Finland (-3.1%), while the weakest positive growth rates were recorded in Luxembourg (0.1%) and France (1.0%).
- In Q4 2025, the highestannual increases in housing prices in the EU were recorded in Hungary (21.2%), Portugal (18.9%), and Croatia (16.1%).
- These differences reveal a highly heterogeneous European market: some countries were still experiencing rapid appreciation, while others remained nearly stagnant or were even in a correction phase. Thus, when it comes to the European real estate landscape, we cannot say that we are looking at a single market, but rather at dozens of local markets with their own dynamics, directly influenced by national social, political, and economic factors.
QUARTERLY RATE OF HOUSE PRICE GROWTH IN ROMANIA
%
- Romania experienced growth in all four quarters, so it did not enter a period of contraction in 2025.
- In the second half of the year, Romania’s annual growth rate of 6.6% and 6.7% exceeded the EU average of 5.4% and 5.5%, indicating a relative acceleration in the Romanian market.
- Compared to European leaders, we remain in a zone of strong but not exuberant growth, which places us in an intermediate category: more dynamic than the large, mature markets of Western Europe, but less strained than the markets with the fastest-rising prices in Central and Southeastern Europe.
WHAT HAPPENS AFTER INFLATION IS REDUCED?
This is where the nuances come in, because not everything that grows in nominal terms also grows in real terms, and the Romanian market in 2025 best illustrates this rule. Although Romania grew by 6.7% compared to Q4 2024, when we factor inflation out of the equation, the outlook changes and even turns negative.
REAL INCREASE IN HOUSING PRICES
% | Y/Y
- With five consecutive years (2021–2025) of real decline, inflation has systematically eroded a significant portion of nominal growth.
Imagine that in 2022 you bought an apartment for €100,000. In 2025, you see it listed at €110,000 and feel like you’ve made a 10% profit. But during that same period, prices across the economy (food, utilities, services) have risen by 15%. On paper, you seem richer, but in reality, you can afford fewer goods than before. |
- Romania has a real estate market with strong nominal growth, but inflation has eroded much of that growth. Anyone who bought a home as an investment in 2022 or 2023 has gained less in real terms than the listed prices suggest.
- While, in Europe, the highest deflated price increases in 2025 were recorded in Portugal (+14.7%), Hungary (+11.7%), and Croatia (+10.0%), Romania (+1.7%) ranks among the bottom five countries in the EU, alongside Finland (-3.6%) and Sweden (-1.6%).
AND YET... IF ROMANIANS' PURCHASING POWER HAS DECLINED, WHY AREN'T PRICES FALLING?
In addition to the fact that real purchasing power has been eroded by inflation and the number of transactions has fallen, nominal prices have not dropped. And if you’re wondering why, the answer lies insupply.
In 2025, 17,300 homes were completed in Bucharest and Ilfov, the second-lowest figure in the last six years, up by only 1.8% compared to 2024. New supply is low. And when supply remains low and demand persists, nominal prices do not fall.
While uncertainty in the national and international context has created a combination of structural factors (rising taxes, persistent inflation, and higher energy and raw material costs) that are driving up both material and labor costs, new residential construction will most likely remain low, and supply relatively scarce.
ARE RENTALS STILL AN OPTION?
Renting remains, in theory, an alternative, but the figures show that this option is also becoming increasingly expensive. Between 2015 and 2025, rents in Romania rose by approximately 60%, and housing prices by about 70%, both above the EU average, where prices rose by 64.9% and rents by only 21.8%. In other words, Romania has not only become more expensive, but prices have risen at an accelerated pace, including for “monthly rent payments,” not just for home purchases.
Viewed more broadly, at the EU level, this gap between housing prices and relatively moderate rents hassignificantly eroded access to homeownership, especially for young people and households without assets. The sharp correction in 2023, followed by a rapid rebound in 2024–2025, points to a market that is extremely sensitive to borrowing costs, structurally supported by a lack of supply—much like a market where demand always recovers faster than the capacity to build.
AFFORDABILITY: THE REAL CHALLENGE FACING THE HOUSING MARKET
Romania has a robust real estate market in nominal terms, and that cannot be ignored. However, five consecutive years of negative real prices indicate that inflation has quietly eroded part of the growth. The real issue is not whether the market is growing or not, but that affordability is deteriorating: homes are becoming harder to buy relative to income, new supply remains insufficient, and construction costs are not likely to fall anytime soon.
The long-term solution lies in increased supply, faster approvals, and more accessible financing options for the public. Without these, the gap between those who already own an apartment and those trying to buy one will continue to widen.
