Romania’s National Bank signals the risk of rising real estate prices
Romania’s National Bank (BNR) has signaled the risk of rising real estate prices for the first time after the economic crisis.
The real estate prices have increased by about 7% in the last year. This increase may not seem big, but it’s above the European Commission's signal value of 6%, said the BNR deputy governor Liviu Voinea.
Higher household income and low interest rates have contributed to rising prices, he added.
“There are premises for the expansion of the real estate market, not only in our country but also in the region,” the BNR official said. However, the risk of a new boom in the real estate sector is still low.
In total, the central bank has identified five risks to the financial stability, in its latest report on this issue. The highest risk is the rapid deterioration of the foreign investors’ confidence in emerging economies. The higher budget deficit, poor corporate lending, and uncertain legal framework are considered medium systemic risks.
Overall, BNR sees lower risks to financial stability compared to last spring.