Romanian Residential Market Faces Adjustment as Consumer Confidence Slumps

Romania’s housing market is entering a cooling phase after several years of exceptional demand, with consumer sentiment weakening and fiscal changes reshaping buyer behaviour.

According to Eurostat, Romania’s consumer confidence index fell to –31.5 in August 2025, well below its long-term average of around –17. Colliers consultants describe the first half of this year as registering the sharpest slide in optimism since the 2009–2010 crisis, excluding the brief pandemic shock, and warn that the downturn in confidence could prove more persistent this time.

Uncertainty over fiscal policy dominated the early months of the year. The government’s decision to raise the standard VAT rate from 19% to 21% on 1 August 2025 triggered volatility in the residential market, as debates over timing and exemptions unsettled potential buyers. Once the increase was confirmed, many households rushed to close deals ahead of the change.

This was reflected in transaction data. The National Agency for Cadastre and Real Estate Publicity (ANCPI) recorded 66,013 property deals in July, one of the most active months in recent years. Activity eased in August to 53,433 transactions, but that still represented 2,366 more than in August 2024. Colliers noted that more than 17,000 apartment-type units changed hands nationally in July alone, including over 5,000 in Bucharest, as buyers accelerated purchases before the higher tax took effect.

In total, ANCPI data show 408,332 property transactions of all types were completed in the first eight months of 2025. While this figure aligns broadly with last year’s levels, analysts point out that it masks growing caution among households.

On the supply side, constraints are becoming visible. Data from the National Institute of Statistics (INS) indicate that 24,609 dwellings were completed in the first half of 2025, down by 1,327 units year on year. Both the first and second quarters showed lower delivery volumes than in 2024. Rising construction costs—driven by higher material prices and the impact of new fiscal measures—are keeping price pressures elevated, particularly in centrally located and well-connected areas. By contrast, developers in suburban and metropolitan zones, where land remains more affordable, continue to deliver at more stable price levels.

Colliers emphasises that the market is undergoing a period of adjustment rather than a structural downturn. “Although sentiment and activity have weakened, this is not comparable to the collapse seen during the global financial crisis,” said Gabriel Blăniță, Associate Director for Valuation & Advisory Services at Colliers Romania. “The fundamentals remain supportive: major cities still face a housing deficit, households are overcrowded by European standards, and purchase intentions remain higher than in the pre-pandemic period.”

Still, challenges loom in the short term. Fiscal changes—including higher VAT, increased excise duties and rising energy costs—are eroding disposable incomes. Mortgage rates remain elevated, and the labour market, while stable overall, shows early signs of softening. Aggregated employment data indicate a slight decline in June to July, though official monthly statistics do not yet confirm a sustained trend of job losses.

The near-term outlook suggests that housing demand will be more selective, with fewer transactions closing compared to the highs of recent years. Over the longer horizon, however, Romania’s structural housing needs, combined with urban growth, are expected to underpin the sector.

Source: Colliers Romania