Romania’s land market held back by economic and regulatory uncertainty

Romania’s land market ended 2022 with a performance in line with the pre-pandemic years (EUR 58 mln), after the outstanding “post-pandemic” year 2021 (EUR 800 mln) – but the massive deal pipeline accumulated during last year is somehow frozen by the economic and regulatory uncertainty, according to the latest report of real estate consultancy firm Colliers. The volatile risk-free rate and the uncertain developments in terms of inflation and interest rates turned buyers more cautious while urban planning issues (a hint to Bucharest district urban planning documents being scrapped in court perhaps) put on the ice some of the deals, the consultancy company explained. Eventually all these – including the war in the region – will end up by surfacing in the land prices that might edge down, the report hints. “We are expecting for Romania to enter a more complicated period for its economy in general, and most likely also for its land market. Given the rise in construction costs, we are not seeing too many new projects being started right now, which will impact future demand for land plots. Consequently, more and more developers are only on the lookout for opportunistic buys or strategic acquisitions when it comes to land. In this context, we believe that certain sellers may need to adjust their price expectations if they will want to close a deal in the following period”, explained Sinziana Oprea, Director of Land Agency at Colliers Romania.