Globally, the real estate investment market continues to grapple with the same challenges it faced last year. Both buyers and sellers remain hesitant to compromise, resulting in a stagnant market with limited investment opportunities and delayed transactions. Significantly impacted by high inflation and the subsequent rise in interest rates, investor activity has been subdued but is anticipated to gain momentum in the near future. As interest rates begin to decline, price stabilization is expected, which should encourage more investor engagement. This shift could lead to increased market liquidity and a more dynamic investment landscape, as investors regain confidence and seek to capitalize on emerging opportunities in a more predictable economic environment. The anticipated stabilization in prices, coupled with lower borrowing costs, may also attract new entrants to the market, further fueling activity.
On a European level, preliminary data indicates that investment volumes in H1 2024 were almost identical to those in H1 2023, and still roughly half of the 2017-2022 average. In contrast, the CEE region outperformed the previous year, with investment increases ranging from 16% in Hungary to 150% in Romania.
In the first half of 2024, the Romanian real estate market recorded a total investment volume of just over €417 million, marking a substantial increase compared to the previous year. This figure not only represents significant growth but also surpasses the levels seen in H1 2020 and H1 2021. The recovery was also visible on the average deal size, which increased to €27.8 million from €15.2 in H1 2023. Investor sentiment however remains cautious and, as a result, there is limited anticipation for the closing of any major “surprise” deals in the second half of the year. The market is bracing for a steady continuation of planned transactions, with little expectation of significant deviations from the current trajectory. Still, given this predictability related to upcoming transactions, the total volume of investments for 2024 will most likely surpass that of 2023.
