Bucharest, August 11, 2025 – On August 1, 2025, the VAT rate for new housing increased from 9% to 21%, a fiscal change with a direct impact on prices and sales strategies in the residential market. According to Valentin Neagu, Managing Director of Crosspoint Real Estate, the impact will be felt most strongly in the mass-market segment, where the stock of homes below the €120,000 threshold was already limited. In contrast, the mid- and premium segments, where the standard rate already applied, will be affected mainly by the general rise in construction costs.
“In major cities, apartments with reduced VAT were becoming increasingly scarce, and in Bucharest only a few established mass-market areas still had a relevant inventory. The jump from 9% to 21% is too great to be fully absorbed by developers without affecting margins. At present, price increases can no longer be labeled speculative; they are dictated by cost realities – more expensive energy, utilities, and construction materials,” explained Valentin Neagu.
The tax changes come against the backdrop of a demand already declining compared to last year. However, this trend is not the result of reduced solvent demand but of a period of uncertainty generated by the economic and political context. In the first seven months of 2025, transaction volumes in Bucharest were 6.8% lower than in the same period in 2024 – a temporary adjustment likely to fade over the next 6–12 months as the market recalibrates. Contributing factors include reduced purchasing power, wage freezes, more difficult access to credit, and limited available supply.
The immediate effect of the VAT hike was seen in July, when buyers rushed to close transactions before the change took effect. According to ANCPI data, apartment sales rose by 16.7% nationwide compared to July 2024, with a 12.7% increase in the Bucharest metropolitan area (+11.1% in the capital and +20.6% in Ilfov). Significant increases were also recorded in major regional centers: Cluj +20.2%, Iași +27.3%, Timiș +15.4%. “No other year has recorded such high July sales volumes as 2025, surpassing even the record years of 2021 and 2022,” emphasized Valentin Neagu.
Regarding buyer and tenant behavior, the market is currently in a wait-and-see phase. Many potential buyers are postponing purchases not due to lack of resources, but to better assess the impact of the new conditions on prices and offerings. This caution is accompanied by the extension of rental contracts – a trend that could reverse once perceptions of economic stability improve. “Many will choose to remain in their preferred area, even if that means a smaller surface, but they will be more attentive to the price–quality ratio and included amenities,” added Valentin Neagu.
In the rental market, the estimated increase of over 10% in Bucharest and major cities by the end of the year reflects both cost pressures and changes in consumer behavior. This evolution is a controlled one, and if the macroeconomic context normalizes, the growth pace could moderate after 2026, as access to home ownership becomes easier again. “As every year, in university centers, rents rise until October 1 and then stabilize, but this year’s difference lies in the fact that more tenants choose to stay longer term,” noted Valentin Neagu.
The secondary market for older apartments could temporarily benefit from some redirected demand, especially in central areas where the supply of new housing is limited. However, this effect is circumstantial and could diminish as the primary market stabilizes and buyers regain confidence. “Here there is potential for short-term price increases, but as uncertainty decreases, the balance will reset,” explained Valentin Neagu.
Over the next 12 months, Crosspoint does not anticipate a sharp decline in the residential market, but rather a moderate adjustment. Limited supply and a slow pace of permits will keep demand relatively high. “In the first six months of 2025, new home prices rose by 10% compared to December 2024, and the trend is far from reversing,” concluded Valentin Neagu.
Regarding the investments in the commercial segment, the €397 million volume recorded in the first half of the year – only 5% below H1 2024 – confirms the market’s resilience. The cautious period between November 2024 and May 2025 was driven more by political instability than by fiscal changes. “With greater clarity in the domestic and regional context, investment activity is likely to resume an upward trajectory, possibly surpassing 2024 levels by year-end,” estimated Valentin Neagu.