New home sales in Romania plummet 40% compared to 2021
Home sales fell by roughly 40% compared to last year, largely because Romanians now find it harder to get loans. High prices in the real estate market, which show no signs of abating, are also to blame.
The governmental program Noua Casa (New Home), which gives favorable, state-ensured loans to those who intend to buy their first home, has not been successful this year. Only 70% of its funds have been used up since the launch of the program more than six months ago. Last year, eager homebuyers used up all the funds in the first two months.
Of those who did apply this year, 15% opted for the EUR 140,000 loan, while the rest, 85%, chose the EUR 70,000 one.
Experts say that high-interest rates on loans turn Romanians away from buying a new home. The price of construction materials has also gone up, keeping the price of newly-build homes out of reach for many.
“There is a much lower number of purchases, both of new and old homes. If we’re talking about new homes, we can say that the decrease is of at least 30-40%,” Bogdan Ivan Cosmin, secretary general of the Romanian Real Estate Developers Association told Digi24.
Official numbers tell the same story. In the first ten months of 2022, there have been 11,000 fewer sales of houses and apartments.
The drop in sales, however, is not reflected in the price of homes that are currently up for sale. Ironically, new home prices rose by a record 20% this year. Experts say that the number of renters will increase as a result, which will also push up the average rent.