Authored by the expert who managed and guided the team behind the Romania Property Pack
Everything you need to know before buying real estate is included in our Romania Property Pack
Are you considering investing in Romania’s real estate market? What are the legal steps, tax implications, and cultural differences you need to understand before taking the plunge? What challenges do foreign investors typically face, and how can you overcome them?
These are the questions we hear most often from foreign investors because we’re actively connected to this market. We’ve spent time working with local agents, developers, and investors, so we know what works—and what doesn’t. That’s why we’ve written this article: to provide a clear guide that answers the questions we get asked daily.
Our goal is to help you, as a foreigner, to navigate the property buying process with confidence. If you think there’s something we missed or want more details, let us know (please do!). Your input helps us refine and improve our advice for everyone.
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1) Consider properties in Cluj-Napoca for high rental demand, as it’s a rapidly growing tech hub
Investing in Cluj-Napoca properties is a smart move because the city is a thriving tech hub.
With tech companies and startups flocking to the city, Cluj-Napoca has seen significant economic growth. This boom has led to a surge in housing demand, making it a hotspot for property investors.
Rental prices have shot up, with a small studio costing about €350 a month and larger apartments going for over €700. This high demand has made it tough for locals to find affordable places, but it means high rental yields for investors.
Property values in Cluj-Napoca are climbing faster than in Bucharest, with the average price at EUR 1,760 per sq.mt. This trend points to a lucrative opportunity for those looking to invest in real estate.
The tech sector's growth is also driving employment, which in turn fuels the increased demand for housing. This cycle of growth and demand makes Cluj-Napoca an attractive destination for property investment.
Sources: Cluj XYZ, World Bank
2) Consider secondary cities in Romania for better deals and growth, as Bucharest’s property market is highly competitive
The property market in Bucharest is fiercely competitive, with prices steadily climbing.
In 2023, apartment prices in Bucharest jumped by 5.35%, reaching €1,634 per square meter. By 2024, they climbed even higher to €1,663 per square meter, marking a 6.6% increase from February 2023. This trend shows a strong demand, making it a tough market for buyers.
Bucharest's booming economy and high rental demand have sparked bidding wars. With a rental yield of 6.36%, it's one of Eastern Europe's hottest markets. But, the limited land for new builds in central Bucharest keeps supply tight, pushing prices up even more.
Looking beyond Bucharest, secondary cities like Cluj-Napoca and Timisoara offer better deals. They boast rental yields between 5.34% and 8.41%, with city averages around 6.46%. These cities are also seeing infrastructure upgrades, like new metro lines, boosting property values.
Historically, secondary cities have seen faster property appreciation than Bucharest. For instance, Cluj-Napoca experienced a 10.18% rise in apartment prices in 2023. This makes them attractive for those seeking growth potential.
Sources: Cushman & Wakefield Echinox, The Luxury Playbook, Global Property Guide
We created this infographic to give you a simple idea of how much it costs to buy property in different parts of Romania. As you can see, it breaks down price ranges and property types for popular cities in the country. We hope this makes it easier to explore your options and understand the market.
3) Focus on eco-friendly and energy-efficient homes in Romania, as they are gaining popularity among buyers and renters
Eco-friendly and energy-efficient homes are becoming a big hit in Romania.
In fact, 83% of Romanian homeowners have already made moves to boost their homes' energy efficiency, focusing on better thermal insulation and cutting down on energy use. This shift is not just about saving money; it's about creating a more sustainable lifestyle that appeals to both buyers and renters.
The Romanian government is backing this green wave with a hefty EUR 804 million green energy program. This initiative is designed to help local authorities and district heating systems invest in green energy solutions, showing the government's serious commitment to sustainable living. It's a great time to consider properties that align with these eco-friendly goals.
Romanians are also becoming more conscious of their consumer choices. A study found that 6 out of 10 Romanians believe their decisions can impact sustainability, which is driving the demand for energy-efficient homes. This mindset is reshaping the real estate market, making green homes more desirable.
Moreover, the number of green building certifications in Romania is climbing. Projects are increasingly receiving sustainable certifications like LEED and BREEAM, which are recognized globally. This trend not only boosts property values but also ensures a healthier living environment.
For those looking to invest, this is a golden opportunity. The focus on sustainability is not just a trend; it's becoming a standard. Properties that meet these criteria are likely to see increased demand and potentially higher returns.
Sources: Energy World, Balkan Green Energy News, Build Green
One of our partners sent us this video where eco-friendly housing trends in Romania are highlighted, showcasing energy-efficient homes inspired by traditional Romanian designs.
4) Keep in mind Romanians often prefer buying over renting, which can impact rental market dynamics and your investment strategy
In Romania, over 95% of the population owns their homes, making it one of the highest homeownership rates in Europe.
This trend is rooted in history, with events like the New Agrarian Reform of 1864 and the fall of communism in 1989 playing a big role in making homeownership accessible. Owning a home is seen as a symbol of stability and success in Romanian culture, which is why many prefer buying over renting.
The government has sweetened the deal with incentives for first-time buyers, further fueling the desire to own property. Low property prices compared to Western Europe make buying a home more affordable, although it still takes a significant chunk of household income.
Despite the affordability, owning a home is a major financial commitment. Rental yields are relatively low because of the high homeownership rate, which might make rental investments less appealing.
For those considering buying property in Romania, understanding these dynamics is crucial. The cultural and historical context heavily influences the market, and knowing this can guide your investment strategy.
Sources: Trading Economics, 3Seas Europe, Romania Insider
5) Research thoroughly and gain local insights, as property prices can vary widely within the same Romanian city
In Romania, property prices have shown intriguing variations across different neighborhoods within the same city in 2023 and 2024.
Take Bucharest, for example. Areas like Floreasca and Aviatiei have seen property values rise thanks to urban regeneration projects and new cultural spaces. These changes have made these neighborhoods more desirable and, as a result, more expensive.
In Cluj-Napoca, there's a noticeable gap between the city center and the outskirts. The central areas boast significantly higher prices, with the average selling price hitting €2,640 per square meter. This pattern isn't unique to Cluj-Napoca; cities like Brasov also show similar trends, with central areas experiencing more substantial price hikes.
Local real estate agents stress the importance of understanding neighborhood-specific pricing. They highlight how infrastructure investments and luxury developments can drive up property values in certain areas. In Bucharest, neighborhoods like Tineretului and Universitate have seen long-term value increases due to such developments.
For potential buyers, it's crucial to grasp these dynamics. Knowing which areas are on the rise can help you make a smart investment. In Bucharest, for instance, urban regeneration projects are a key factor in determining property values.
So, if you're considering buying property in Romania, keep an eye on these trends. Understanding the local market can give you an edge, especially in cities where neighborhood-specific factors play a significant role in pricing.
Sources: Global Property Guide, Romania Insider, Aparthotel.com
From this video, we realize that property price variations in Bucharest are notable, with luxury areas commanding significantly higher prices than other neighborhoods.
6) Avoid properties in Romania with unclear ownership histories due to complex post-communism restitution issues
When considering buying property in Romania, be wary of unclear ownership histories.
Romania's property landscape is shaped by its complex post-communist restitution history. Many properties, especially those linked to Hungarian churches, Greek Catholic, and Jewish communities, are still entangled in unresolved claims. This highlights the slow and challenging restitution process that potential buyers should be aware of.
There have been instances where properties were mistakenly returned to the wrong individuals or even returned multiple times. Such errors have led to numerous disputes and legal battles, complicating the property market further.
The European Court of Human Rights has criticized Romania for these restitution issues, pointing out flaws in the country's restitution laws that contribute to delays and injustices. This criticism underscores the importance of thorough due diligence when purchasing property.
For those interested in Romanian real estate, understanding these historical and legal complexities is crucial. The restitution process can be unpredictable, and potential buyers should seek expert advice to navigate these challenges effectively.
Sources: HHRF, WJRO, Legal 500
7) Expect higher transaction costs in Romania due to elevated notary fees compared to other European countries
When buying property in Romania, be prepared for high notary fees compared to other European countries.
In places like France and Germany, notary fees are usually between €60 and €100 per service, while in the UK, they range from £70 to £100 per document. But in Romania, the cost for authenticating a sale contract can soar to around Lei 1,900 (about €1,900 with 19% VAT included), not including other registration fees.
These fees can be a significant chunk of your total transaction costs, as noted by real estate agencies and financial news outlets. Many property buyers in Romania are caught off guard by these expenses, which can sometimes discourage them from making a purchase.
It's not just the notary fees that can add up. Additional costs like registration fees can further inflate your expenses, making it crucial to budget carefully. This is especially true if you're used to the lower fees in other European countries.
Understanding these costs upfront can help you make a more informed decision. It's always a good idea to consult with local experts or use online calculators to get a clearer picture of what you'll be paying.
So, if you're eyeing a property in Romania, keep these fees in mind to avoid any surprises. They might be higher than what you're used to, but knowing this can help you plan better.
Sources: Notary Fees and Costs Explained for 2023, Notary Fees Calculator for Individuals Romania, How Notaries in Europe Are Different from the U.S.
8) Consider short-term rentals in Brasov and Sibiu for higher returns, as they are popular in tourist-heavy areas
Buying property in Romania's tourist hotspots like Brasov and Sibiu can be a smart move.
These areas are bustling with visitors, making them prime locations for short-term rentals. Brasov, for example, is Romania's second most popular tourist destination, attracting a significant portion of the country's visitors. This influx naturally boosts the demand for places like Airbnb.
Investors often find that short-term rentals yield higher returns than long-term leases. In Timisoara, another tourist magnet, short-term rentals can bring in around $8,000 annually, which is more than what you'd typically get from a long-term lease. This is thanks to higher occupancy rates and flexible pricing.
Tourists love using platforms like Airbnb, with 9 out of 10 recommending these services in Romania. This satisfaction fuels the popularity and profitability of short-term rentals in these areas.
Understanding the local market can give you an edge. For instance, Brasov's popularity as a tourist destination means there's always a steady stream of potential guests. This makes it easier to keep your property booked and profitable.
In Sibiu, the charm of the old town and cultural events draw crowds, making it another hotspot for profitable short-term rentals. The ability to adjust prices during peak seasons can significantly boost your income.
Sources: Airbtics, Academic Conferences, Romania Insider
In this video, we can see that short-term rentals in Brasov and Sibiu are lucrative, with discounts for extended stays and benefits from tourist-heavy areas.
9) Target properties near new infrastructure projects for significant value appreciation after completion
Romania's construction sector is booming, especially in 2023 and 2024, thanks to strong private demand and public investment.
In Bucharest, property values have surged due to urban modernization and infrastructure upgrades. This trend is spreading to cities like Cluj-Napoca and Timisoara, where new apartment demand is driving prices up.
The Romanian government is heavily investing in infrastructure, which is set to boost local real estate markets. Along the Black Sea coast, areas like Constanta and Mamaia are becoming hotspots, attracting investors with tourism potential and a growing interest in short-term rentals.
Focusing on properties near new infrastructure projects can give you an edge, as these areas often see significant appreciation once the projects are completed. For instance, new transport links and facilities can transform a neighborhood, making it more desirable.
Investors are particularly interested in regions where European funding is being utilized for development, as these areas promise growth and increased property values.
Keep an eye on upcoming projects and government plans, as they can offer insights into where the next real estate boom might occur. Strategic investments in these areas could yield substantial returns.
Sources: Romanian Real Estate Market Forecasts 2025, Report: Romanian Real Estate Market Ends First Half of the Year with Favorable Outlook, Colliers: Romania's Construction Market Has Reached Historic Highs Over the Past Two Years
10) Avoid properties with unresolved restitution claims to prevent legal issues and potential investment loss
Buying property in areas with unresolved restitution claims in Romania can be a risky move.
In cities like Bucharest, the restitution process is notoriously slow and complex, with many cases dragging on for years. This means you could face long delays before you can actually use or sell the property. Imagine investing in a place only to find out you can't do anything with it for a long time.
The system is also fundamentally flawed. Claimants have to prove their claims without getting compensation for demolished properties. This can lead to legal complications, as current occupants might be allowed to stay for extended periods, preventing you from accessing your investment. The Special Restitution Committee's low positive decision rate of 16.64 percent shows how tough it is for rightful owners to reclaim their properties.
Financially, investing in these areas can be a gamble. The inefficiency of local authorities and the lack of clear decisions can lead to uncertainties and potential financial losses. Property values in areas with unresolved claims may remain stagnant or even decline due to the ongoing legal issues, impacting the overall market stability and your potential returns on investment.
Property values in these areas might not grow as expected. The ongoing legal issues can keep them stagnant or even cause them to drop, affecting the market stability and your potential returns. It's like putting your money in a place where it might not grow.
11) Build relationships with local agents in Romania to access off-market opportunities, as locals often use personal networks for real estate deals
In Romania, real estate deals often hinge on personal networks.
Locals and expats alike have discovered that building relationships with local agents is crucial for finding properties that aren't publicly listed. This is especially true in sectors like logistics and industrial spaces, where off-market opportunities are more common.
Many property buyers have shared that the insider information from local agents can make a big difference in securing a good deal. This isn't just a passing trend; it's a well-established part of how business is done in Romania.
Real estate agencies often stress the importance of these connections, as they can be the key to unlocking hidden gems in the market. In fact, a significant number of property transactions happen through these personal networks rather than through public listings.
Understanding this dynamic can give you a competitive edge if you're looking to invest in Romanian real estate. By tapping into these networks, you can access properties that others might not even know are available.
So, if you're considering buying property in Romania, remember that local relationships can be your best asset. It's not just about what you know, but who you know that can open doors to unique opportunities.
Sources: Romania Insider, Crowdsq, The Diplomat
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12) Take advantage of Romania’s low property tax for long-term investment benefits
Romania offers some of the lowest property taxes in the European Union, making it an attractive option for long-term property investment.
Imagine paying less in taxes compared to other countries; that's Romania for you. The country ranks 6th from the bottom in property taxation as a percentage of GDP. This means more of your money stays in your pocket, a big plus if you're thinking about investing here.
One of the comforting aspects of investing in Romania is the stability of its property tax rates. For example, in 2019, property taxes accounted for just 12.8% of the total local budget revenues across all municipalities. This kind of stability is reassuring for investors who prefer not to deal with unexpected tax increases.
International real estate agencies often highlight Romania's low property tax rates as a major draw for investors. According to Avison Young's 2023 market overview, Romania's tax rates are a key selling point, making it a favorable destination for real estate investment.
For those looking to invest, Romania's low property taxes are not just a statistic; they are a strategic advantage. This is particularly appealing in a market where every percentage point can make a difference in your investment returns.
So, if you're considering buying property in the country, know that Romania's tax environment is designed to benefit investors. This could be the edge you need to make a smart investment decision.
Sources: Global Property Guide, FES Library, Avison Young
13) Consider buying through a Romanian company, as foreigners can purchase apartments but not land directly
In Romania, foreigners can buy apartments but not land directly.
If you're a non-EU citizen eyeing Romanian real estate, you can easily snag an apartment in hotspots like Bucharest's Primăverii district. But if you're dreaming of owning land to build a house, you'll need to set up a Romanian company to make that happen.
Many foreign investors are drawn to Romania's real estate market because of its steady growth and economic potential. However, navigating the legal landscape can be tricky, so it's wise to get some legal advice to ensure you're on the right track.
Real estate agents and legal experts often recommend consulting with professionals to understand the nuances of Romanian property laws. This step is crucial to avoid any legal hiccups and to fully capitalize on the opportunities in the market.
Romania's unique property laws are designed to protect local interests while still allowing foreign investment. This means that while you can buy an apartment with ease, owning land requires a bit more planning and understanding of the local legal framework.
So, if you're considering investing in Romania, remember that setting up a Romanian company could be your ticket to owning land. This approach not only complies with the law but also opens up more investment opportunities.
Sources: Romania Real Estate Investment Guide for Foreigners 2024, Can Foreigners Buy Real Estate in Romania?, Romania Home Ownership Rate
While this article provides thoughtful analysis and insights based on credible and carefully selected sources, it is not, and should never be considered, financial advice. We put significant effort into researching, aggregating, and analyzing data to present you with an informed perspective. However, every analysis reflects subjective choices, such as the selection of sources and methodologies, and no single piece can encompass the full complexity of the market. Always conduct your own research, seek professional advice, and make decisions based on your own judgment. Any financial risks or losses remain your responsibility. Finally, please note that we are not affiliated to any of the sources provided. Our analysis remains then 100% impartial.