Romania posted a record annual GDP growth, of 13.6% in Q2 and 6.5% in the first half of 2021, placing itself in the first third of EU members from this point of view. Thus, the annual GDP growth forecast was revised by the European Commission at 7.4%, one of the best levels in the Union. The policy rate was maintained by the National Bank of Romania at 1.25%, while the medium wage increased in the last year by 7.5% (last available data).
In this context, the local real estate market registered good results, with the residential and logistics segments posting new all-time records, while the retail market recovered after the decreases registered in 2020 and the office market waiting for the employees to return.
The residential market was by far the star of the last 18 months. The total number of transactions increased at a national level by 11,6% in 2020 compared to 2019, while the first half of 2021 brought a further annual increase of 32.6%. Bucharest and its surroundings, the biggest local residential regional market, registered an even better result, with 56% annual increase in closed transactions in H1 2021.
This was possible mainly to the good accessibility of purchasing a new home, which remains at the best level in the last 14 years, despite the Covid-19 pandemic. Today, is almost four times more accessible to purchase a new home in Romania, taking into consideration the wages, prices and the stable exchange rate – approximately 1% depreciation for the RON VS EUR. Meanwhile, interest rates on the mortgage segment decreased to a new minimum, of 4.5% during Q2 2021.
The logistic segment posted also excellent results, with deliveries of over 500,000 square meters in 2020 and 2021 (forecasted) and a vacancy rate which decreased to less than 4%. The total logistic and industrial surface leased in H1 2021 increased with approximately 20% compared with the similar period from 2020, while the second half of the year is expected to bring similar results.
Prime yields remained unchanged, at approximately 7% on the office segment, 7.25% – 7.5% on the retail segment and approximately 8% for the logistic sector. These levels are 1.5 – 2 base points higher compared to the levels registered in other Capitals from the CEE region. The total investment transaction volume reached approximately EUR 300 million in H1 2021, while for the full year forecast indicates a potential volume of EUR 0,8 – 0.9 billion.
The office sector attracted the biggest share of investment transactions. Total take-up in the second quarter increased significantly, the profile segment showing signs of recovery after the decreases caused by the Covid-19 pandemic and the work from home system. At the same time, wage increases led to good results for the shopping centres, similar to the levels registered in 2019.
Romania remained thus, one the most attractive investment targets in the region, offering better yields, higher returns and a general good business environment, with consumption expected to further increase significantly in the following years.