Romania’s residential real estate market remains undervalued despite continued price increases, as housing prices remain below levels justified by household income, financing costs and rental prices, according to the National Bank of Romania (BNR). Independent analysts have a different opinion.

"Housing prices are below the level of economic fundamentals both nationally and in Bucharest. Regardless of the methodology used to estimate the degree of over/undervaluation, the results consistently indicate an undervaluation of the residential real estate market," the BNR said in its latest Financial Stability Report, cited by Profit.ro.

The central bank said the gap between strong demand and limited housing supply continues to support price growth, while affordability has improved slightly as wages increased faster than housing prices.

Residential property prices rose by 6.7% year on year in the fourth quarter of 2025, exceeding the EU average increase of 5.5%, but remaining below growth rates recorded in Hungary (21.2%), Bulgaria (14.5%) and the Czech Republic (8.5%). Romania's increase was above Poland's 4.3% advance.

In real terms, however, housing prices declined by 2.6% during the period due to inflation of almost 10%.

The BNR estimated that affordability improved in 2025, with the period required to purchase a two-room apartment without mortgage financing decreasing to 7.9 years from 8 years in 2024. The improvement was driven by wages growing faster than housing prices.

Affordability varies significantly between cities, ranging from 6.8 years of income required to purchase a two-room apartment in Bucharest to 12 years in Constanța, according to the central bank.

The BNR assessment differs from the views of members of the CFA Society Romania. According to a survey published by CFA Romania at the end of June, 67% of respondents considered current residential property prices overvalued, while 20% viewed them as fairly valued.

Regarding the outlook for housing prices in major Romanian cities, 53% of CFA survey participants expected prices to stagnate over the next 12 months, while 47% anticipated a decline.

iulian@romania-insider.com

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