Are housing prices falling?
The price reductions did not come. Moreover, according to the study carried out by imobiliare.ro on the real estate market in Romania, the prices of new apartments increased by 2.8% in the first quarter of 2023, compared to the first quarter of 2022.
It is very unlikely that prices will drop, given that many developers are no longer building, and very few building permits have been given in Bucharest in recent years.
The rent price increased consistently in 2022
Against the background of the difficulty in contracting a bank loan, the Romanians turned to the houses for rent. This led to a considerable increase in the amounts requested by the owners for renting the apartments. According to imobiliare.ro, in Bucharest, the average amount requested for renting a studio apartment has reached EUR 300, 9.2% more than in 2021. The rent for a 2-room apartment has reached an average of EUR 450 per month, with 6.7% over the value of the previous year.
This raises the question of whether, perhaps, the purchase of an apartment with a bank loan is still more advantageous than renting.
Good signs for those who want to buy a house with a bank loan
The month of May 2023 came with good news on the credit market. At least 2 banks have made available to clients conditions for financing or refinancing loans with a fixed interest rate of 5.9% for 3-5 years.
I made a simulation of the value of bank rates for a two-room apartment in a complex modern, with numerous facilities, such as Aqua City, with a selling price of 100,000 EUR. With an advance of 15% of the price of the apartment, the amount of the loan will be 85,000 EUR. At an annual interest rate of 5.9% and a crediting period of 30 years, the value of the monthly installment reaches 2,498 lei.
The 2-room apartments are rented in Aqua City for 500-550 EUR/month, i.e. a value similar to that of a bank installment. The advantage of the purchase is that you choose a property in which you can live further, leave an inheritance or rent and generate a passive monthly income.
The European Central Bank's estimates of reducing inflation on all European markets is also good news for those planning investments in the near future.
Returning to the initial question: “Is it a good time to buy a house?”, the answer of financing specialists is affirmative. Moreover, put into perspective, a 30-year bank loan will have to face several periods of recession and challenges. It's all about paying attention to the opportunities in the market and adapting the credit conditions to the best solution in the market. Refinancing is one of them!
This material is mainly addressed to those customers who have bought or want to buy a apartment and they want to know more about the options of ;finantare.
If you are planning to buy a house and you need the advice of specialists regarding the best financing conditions today, we invite you to schedule a viewing on the contact page!