Romania Property Investment News

Demand for homes still exceeds supply in Romania

Romania has a severe shortage of housing, according to market research firm PMR, and although the number of new homes being completed is rising year-on-year, it will be a number of years before the demand for homes is met. At the same time, the country is receiving the largest allocation of EU funds of any EU country, which will bring the country’s infrastructure up to a high standard and adds to the country’s potential as an investment destination.

According to figures from PMR, there are currently in the region of 8.3 million homes in Romania, which translates to an overall shortage of around 1 million. Although the rate of construction is speeding up, it is still relatively slow and a significant improvement is expected to be several years away - by 2010 it is estimated that 50,000 dwellings will be completed per year, it is currently significantly fewer. Also, much of the current housing stock is of a poor quality and within the next two decades an estimated 20% of existing properties will be below standard for residential accommodation.

The demand for properties in Romania, arising as it has from the housing shortage, is further fuelled by the growing income of the Romanian people which means an increased demand for high quality housing. A mortgage market has also been established in recent years, so home ownership has become more accessible to the domestic population.

Meanwhile, the country will be receiving around €20 billion in EU funding over the next few years, the majority of which will go towards infrastructural improvements including the transport, education and health systems. As well as further boosting employment and salaries for Romanian people, these improvements are laying the groundwork for a great deal of residential construction that needs to happen over the coming years.