Romania has among the most affordable mortgage loans in the European Union, taking into account the national average salaries and the cost of buying a two-room apartment with a 25-year mortgage loan, reveals a report by SVN Romania Credit & Financial Solutions.
Thus, the average rate for the purchase of a two-room apartment (a two-room apartment in Romania is a one bedroom, one living-room apartment, English editor's note) in Bucharest at the end of last year was about 43% of the average net salary in the national economy, Romania having the best value of this indicator at regional level and among the best values in the European Union.
Thus, the average rate for buying a two-room apartment in Bucharest at the end of last year was about 43% of the national average net salary, Romania having the best value of this indicator at the regional level and among the best values in the European Union.
In SVN Romania's analysis, the purchase of a two-room mass market apartment, with a usable area of 50 square meters, built at least 30 years ago and located outside the central and semi-central areas of the capitals of the European Union was taken into account. A 25-year mortgage loan was also considered, with a 15% down payment and fixed interest for the first five years, not including associated costs such as commissions, notary fees or insurance. Fixed-rate mortgages from the top three banks in each country analysed were taken into account in determining the interest rate.
"The interest rate is not the only relevant indicator on the banking market: even if Romania has higher interest rates compared to Western European countries, the total costs of a loan are significantly higher in the other EU member states, mainly because of real estate prices but also because of the costs associated with a transaction (fees, taxes and insurance), which can amount to tens of thousands of euros," commented SVN Romania Credit & Financial Solutions managing partner Alexandru Radulescu.
The 43% which an average installment for the purchase of a two-room apartment in Bucharest holds in the average salary of a Romanian is recorded in a context in which over 60% of the houses and apartments sold in Romania in 2023 were purchased exclusively from own resources, without recourse to a bank loan, according to SVN calculations based on data from the National Agency for Cadastre and Real Estate Publicity and National Bank data.
Cash transactions continue to account for the majority percentage of total home purchases in a context where the SVN affordability index for buying a new home, calculated as the ratio of prices to wages, has reached the best value in the modern history of the local market, taking into account that the average wage has increased over the last year by 15.1%, while prices have increased, on average, by only a few percent.
The latest BNR data shows that in the first 11 months of 2023, new mortgage loans worth 5.7 billion euros were granted nationwide, up by around 27% compared to the same period in 2022, although these volumes also include refinancing.
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