Analyst: Romanian residential property prices will fall by 25% in two years

Real estate prices in Romania will fall by at least 25% over the next two years, according to projections voiced by Iancu Guda, president of the Association of Financial and Banking Analysts in Romania. Prices have increased driven by developers’ greed, he claimed, according to local Stirileprotv.ro. Guda inferred that renting an apartment “is now cheaper than buying a home” (in terms of overall, ex-post pricing, most likely) at a “much overvalued price”. According to the official figures of the European Union, real estate prices in Romania increased by 40% in 2014-2018, this rate being three times higher than the EU average. Thus, Romania has the most accelerated increase in real estate over the last four years. “I think this increase is not justified by rising raw material costs and wages, the main argument that developers use when explaining why prices have risen. The reality is that prices have risen by 40%, twice faster than justified. Real estate had to be up to 20%. The 40% increase came in an opportunistic context, where developers took advantage of greed at a time when demand was higher than the supply. I expect that in 2019, 2020 at the latest, the price will drop by at least 25% to return to the right value,” explained Iancu Guda in an interview with Stirileprotv.ro. PwC survey: real estate investors turn risk-averse despite moderate prices in Romania editor@romania-insider.com (photo source: Pixabay.com)