The middle-high category will be directly affected by the delayed extension of 5% VAT on home acquisitions and some of the buyers in this category could freeze their purchasing decision at least until 2022.
The hybrid working model – remote work and office work – will have an impact on the design of residential products, while more and more office developers will turn their projects into mixed-use or exclusively residential schemes, JLL noted.
JLL consultants estimate the residential segment will see more build-to-rent projects and estimate the market will focus on established developers with strong financial support, with large volumes of units delivered, especially in the context generated by the postponement of sector area planning permits (for sectors 2,3,4,5, and 6 in Bucharest).
Institutional investors are expected to enter the local residential market, reshaping the rental market altogether by implementing clear rules and international best practices, thus defining new rental standards.
“The pandemic also acted as a catalyst. It has helped in making decisions and accelerating the desire to optimize the spaces in which we live, with a much more pronounced focus on comfort. Up to this point, we have seen a dynamic specific to a mature and stable market, without the slippages we saw in previous years, due to the professionalism of the market players and the solid foundations,” said Andreea Hamza, Senior Living Department Director JLL Romania.
Residential market rents decreased by 10% -15% in the past year as a result of the increased supply of apartments that were previously rented as apart-hotels and are now rented on a long-term basis, and as a result of declining demand coming from students.
The return of the rental market will take place at a rapid pace, JLL notes, as vaccination continues and travel restrictions are expected to be lifted.