the 2023 apartment disaster already making itself felt in Romania

The situation in the housing market has a long tradition of uncertainty when it comes to investments, but in terms of prices for 2023, a consensus has already been created among economists.

In Europe, a consensus has already been created between real estate investors on the sidelines of next year. Accelerating inflation coupled with explosive energy and fuel prices will lead not only to a decrease in the number of real estate transactions, but also to a reduction in tenants. Apartment prices will go down because there is no one left to buy them. Profits from this area they will also descend.

When the housing market recovers, so do apartment prices

The European real estate market and, implicitly, that in Romania will recover somewhat in 2024. The prospects for 2023 are not at all optimistic, as shown by the report Emerging Trends in Real Estate 2023 produced by PWC together with the Urban Land Institute, cited by ZF.ro.

“The outbreak of the war in Ukraine and its aftermath brings a new wave of pessimism among European investors in the real estate sector, after the exit from the health crisis gave them confidence for a short time. Industry leaders predict that by 2023 it will be a difficult year, in which liquidity will decrease, in a market where the volume of investments, rents and the degree of employment will be increasingly low.

Concerns about inflation, interest rates and economic development are on the rise since last year, when they were already starting to alarm the business environment. The opportunities for growth and getting a good return on investment still exist, but the equation of what constitutes a good business has changed again,” said Francesca Postolache, Partner, PwC Romania.

Beyond the opinions on apartment prices, there are also some certainties. The availability of capital for investment in 2023 is at its lowest level since the 2008 financial crisis. As a result, next year will mark a radical decrease in real estate development activity, after 2022 was reflected in a slowdown in the phenomenon.

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