The real estate market is constantly changing both in Romania and in Europe. Investments will increase, but the type of residential housing sought is also different compared to previous years, according to a study by Deloitte Real Estate Confidence Survey for Central Europe 2024.
Investments in the real estate market are increasing
According to the Deloitte Real Estate Confidence Survey for Central Europe 2024, released on Wednesday, half of Central European real estate companies (49%) forecast an increase in investment this year, while only 19% anticipate a decrease, in contrast to of 51% from 2023. This change comes amid improved perception of the growth potential in this market.
In addition, 40% of survey participants predict an increase in market activity this year, compared to just 15% a year ago, while the proportion predicting a decrease decreased to 16%, from 57 % in 2023.
In light of this information, investors are turning their attention to new projects (31%) or to obtaining funds for future investments (19%). A significant percentage, a third of them, anticipate an improvement in the efficiency of their portfolio, which is twice as many as those who anticipate a decrease. The industrial sector remains perceived as the most competitive (31%), followed by the residential sector (21%), according to the study’s conclusions.
Real estate market. Photo source: Dreamstime
Changes in the real estate market. What type of buildings are most sought after
As for developers, a significant trend for 2024 appears to be a reorientation towards other market segments, given that a quarter of them are considering such a change. This phenomenon is more pronounced among office and commercial space developers – three-quarters and half of them, respectively, say they will focus on other sectors in 2024 (especially mixed-use assets or residential rental projects).
“The moderation of the activity in the office market is also noticeable in Romania, as early as 2023, and the transactions that are still taking place have as their object the renegotiation of rental contracts, with an emphasis on the flexibility of the clauses, or the extension of the contractual period.
On the other hand, with regard to retail projects, the local market differs from the regional one, given that there are many ongoing projects and increased appetite for investments in this segment, stimulated by the prospect of reducing inflation and, implicitly, by the increase in the purchasing power of the population.
The industrial segment benefits from growth prospects, given the geopolitical situation, the insufficient stock of such spaces at the national level and the phenomenon of friendshoring, respectively the global and regional tendency to relocate or, respectively, to build various production units in allied states from from a political point of view”, said Irina Dimitriu, Partner Reff & Asociaţii | Deloitte Legal, leader of consulting services for the real estate sector within Deloitte Romania, quoted in the press release.
What challenges will developers face?
Among the top challenges facing developers this year are those related to financing (26%), followed by difficulties associated with acquiring land for future developments (23%), given the prospects for economic recovery, and the process of marketing (18%).
Deloitte has been organizing the Real Estate Confidence Survey for Central Europe annually since 2019, with the aim of assessing the perception of real estate professionals on the evolution of the market in the region. The survey involves three categories of respondents: developers, investors and real estate consultants. At this year’s edition, the participants come mainly from Poland (33%), the Czech Republic (24%) and Hungary (10%), while 24% of them operate in several Central European markets.
