In 2024, we anticipate an increase in demand for housing units, supported by the general need for new quality homes as the majority part of the actual stock is outdated nationwide. The accessibility was declining the last 2 years due to the high costs of mortgage financing, but the anticipated decrease of interest rates and expected wages growth can bounce back the solvable demand.
While the construction costs had increased and several changes in tax incentives for the industry and other regulations had come in force, recently a surge in construction prices is observed. In Bucharest, to these factors influencing the future increase in new dwellings prices we need to add the envisaged downfall of supply for the next 5 years due to the lack of new zoning plans and consequently the issuance of new permits.
At the same time, the decrease in affordability will cause an increase in demand for the rental market, fueled also by the shift of preference of the new generations towards flexibility, debt aversion and accessibility, which brings new opportunities for investors seeking a fixed income and attractive yields.