Costina Petrescu

Real estate has always represented – and will continue to represent! – a very attractive investment opportunity

Costina Petrescu, CEO of, one of the most popular real estate portals in Romania, returns to the pages of our magazine with a very lucid and documented analysis of the Romanian real estate market. We discussed the possibilities of investing in real estate, the dynamics of real estate prices in Romania compared to the EU, the trend of the real estate market in our country and many other things that I invite you to read in the following material.

Costina Petrescu

Is the Romanian property market still undervalued compared to the European property market? Do we still have good house prices compared to the EU average?

I would not even use the term “undervalued”, because the price level is dictated by the supply-demand ratio – taking into account the purchasing power of the population – which differs from country to country. However, compared to other European markets, we do have significantly cheaper housing. Referring now strictly to the Central and Eastern European region, for example, it is very interesting that Bucharest has some of the most affordable purchase prices. Thus, we are still, on average, below the threshold of 2,000 euros per square meter in the Capital, while markets in the region usually exceed the threshold of 3,000 euros per square meter. This difference is due to the fact that, although residential property prices in Romania have been on an upward trend in recent years, their rate of increase has, however, been quite moderate compared to other markets.

Do you think that renting apartments at the sea or in the mountains during the tourist season can be a consistent source of income for those who have the money to invest in it? Or renting apartments in Bucharest to be placed in the tourist circuit, like Airbnb?

I believe that each of the above options can be a viable business opportunity, the deciding factors in the selection process being both the particular buyer/investor profile and the type of property being considered. If we are talking about a purchase on the coast, where a number of real estate projects have been launched in recent years, the integrity and previous experience of the developer, the quality of the project itself, but also the mix of facilities, the latter of which can help us to increase the occupancy of the property, including in the off-season. In the mountains, things are theoretically easier, as we’re talking about an attractive year-round holiday destination, but here it can be more difficult to find new properties of truly superior quality, both in terms of location, construction and facilities. As for Bucharest, on the other hand, an advantage would be that it is always attractive for tourists and the vacancy rate of an apartment can be significantly lower during the year. But it matters a lot where the property is located, i.e. easy access to the centre, as well as everything to do with the interior design – whether we’re talking about a building completed before the 1990s or a newer one.

What is the evolution of prices, demand and supply on commercial spaces located on the ground floor of blocks on boulevards and main streets with a consistent flow of passers-by?

An important change brought about by the pandemic has been the explosive growth of online commerce – a fact that continues to have a noticeable effect on both mall and high street sales. As a result, some shops, including on the high streets, have closed, so the availability of such space has increased considerably – which has naturally led to a fall in asking rents. For example, according to statistics generated by the real estate portal, in the first four months of 2023, the supply of street commercial spaces for rent in the central and ultra-central area of the Capital was more than 50% higher compared to the same period of the previous year. However, the margin of decline in rents for this type of property has been significantly smaller, averaging less than 5% for private advertisements, while agency advertisements have seen an overall decrease of around a third in the average asking price for commercial space. It should be noted, however, that the number of offers published by estate agents increased by 2.65 times during the period in question, so the sample analyzed was significantly larger – the majority of which were newly listed properties.

Some economic analysts are urging us to stop investing in real estate because it’s stupid, they say? What do you think? Are real estate investments still interesting for Romanians?

Real estate has always represented – and will continue to represent! – a very attractive investment opportunity. This is because people will always need a place to live or work, so, at least in a capitalist market economy, there will always be a demand for buying and renting property. And when there is an exchange of goods and services, of course, the opportunity to do business is born. And the experience of the last few years, which has been fully felt in the galloping rise in inflation, I think has shown us once again how important it is to invest in long-term assets that can maintain their value over time despite cyclical market variations. Of course, in the short term, other investment solutions such as shares on the stock exchange or cryptocurrencies may seem more attractive in terms of expected returns, but in the medium and long term, real estate is a much more stable and financially secure option.

Land has become increasingly traded and sought after, especially in light of the pandemic. What do you think, is this trend continuing? Are Romanians migrating out of cities, especially since there is a lot of talk about “15-minute cities”?

The tendency of inhabitants of large cities to “migrate” to suburbs or so-called metropolitan areas has existed for at least 15 years, not triggered, but somehow accelerated, by the pandemic experience. There will always be this segment of the market, usually represented by mature people who already have or intend to start a family and who want to live in their backyard – but without having to give up their city job, its amenities or their circle of friends. For this type of buyer, the easiest solution, at least in terms of available supply, is to move somewhere on the outskirts of the city, but in an area where they can make the daily commute within a reasonable time – a journey of not much more than an hour in the case of Bucharest, slightly less in other regional centers. As for the “15-minute cities” trend, it could pose a threat to the trend illustrated above in the medium and long term, as it would significantly affect people’s freedom of movement. It remains to be seen, however, to what extent this will become a reality; mere talk is not yet enough to change the behaviour of an entire category of consumers.

What is the trend of the real estate market in Bucharest and big cities in the next 2-3 years? Looking for small and easy to maintain spaces from a cost perspective? Or are things changing?

It depends on which market segment we are talking about. When it comes to the residential sector, people will still, as far as possible, want housing that is spacious enough to meet the needs of their families. Of course, the purchase (or rental) price will always put pressure on this, but I believe that Romanians, for whom housing is a priority, will always look for the maximum they can afford, at least when it comes to a permanent residence. As far as maintenance costs are concerned, I believe that the attention paid by buyers to energy efficiency improvement solutions will increase in the coming years, which will also lead to an adaptation of supply in this respect.

In the retail space segment, on the other hand, we believe that with the rapid advance of online retailing, the trend towards a reduction in leased space, whether in malls or on the street, will accelerate in the coming years as retail space becomes more compact and more cost-effective to operate. The exception to this trend will be grocery stores, including “neighborhood” stores, to the extent that the latter survive the massive expansion of large supermarket chains.

A final question. To rent or to own? We know that the mortgage or home loan market is not the best in terms of interest rates charged by banks, but do you think there are opportunities for purchases now or should we wait for better times?

As we already know, Romanians are a people whose preferences overwhelmingly lean towards home ownership. Of course, there is a generational difference, and today’s young people are more flexible in their thinking, but as they mature, they too begin to feel more acutely the need for stability, which buying a home satisfies very well (though not completely, it’s true). As far as the right time to buy an apartment or a house is concerned, my opinion is that it is mostly dictated by personal life circumstances – how old is the person in need of a home, what level of income, future plans, etc. I say this because the economy and the housing market itself are cyclical, and in the future the current level of borrowing costs is expected to decrease. But buying a home cannot be put off forever.