Peak of the market?

2020 had, no doubt, the best peaks at the beginning of 2020, annual decrease of 7.25% -
year-start in the modern history continuing the excellent results please take into account also
of the local residential market. registered in the last quarter the fact that March 2019 was
The excellent evolution of the of 2019 – with two out of three the month with the best results
market registered in the second months with annual increases in the first semester of last year.
half of last year, the constant of over 25%.
revenue increases, doubled by a Overall, the first quarter of
good level of consumers trust, Thus, January and February 2020 brought good results,
and a constant price increase, brought annual increases in with an increase of 6.85%
at a steady pace, represented transactions of over 15% each. in transactions closed in
the main factors that led to all- The general lockdown imposed Bucharest and Ilfov county,
time records on the market. from the second half of March compared to the similar period
had, on the other hand, an from last year, topping the
The number of closed immediate negative impact, annual increase of only 1.76%
transactions reached also new resulting in an transaction registered in 2019.

Transaction y-t-d evolution 2019-2020

January January January January January January January January January January February March 2019 April 2019
- March - April - May - June - July - August - September - October - November - December 2019 - - February - March
2019 2019 2019 2019 2019 2019 2019 2019 2019 2019 January 2020 2020 2020

10.00%
8.00%
6.00% 6.46%
5.93%
4.00%
3.68%
2.00%
1.76%
0.00%
-1.13%
-2.00%
-3.41%
-4.00%
-5.49%
-6.00%
-8.00% -8.77%
-9.70%
-10.00% -10.53% -10.38%

-12.00% -12.01%
-13.88%
-14.00%
-16.00%

Source: SVN Romania, ANCPI

Q1 2020 March 2020 March 2020 Q1 2020

+6.85 %
-7.25 %
+7.88 %
+14.7 %

annual increase in transactions annual decrease in transactions annual increase in transactions annual increase in
closed in Q1 2020 in Bucharest registered in March 2020 in registered in March 2020 at a transactions registered in Q1
and its surroundings Bucharest and its surroundings national level 2020 at the national level
The increases in registered
transactions could also be
explained by new records
regarding residential unit
deliveries in Bucharest and its
surroundings. As SVN Romania
estimated at the beginning
of 2019, last year brought the
best result in the last 30 years,
with almost 15,000 new homes
delivered.
The new record represents a
31.6% increase over 2018, the
biggest registered since 2008.
The new peak in deliveries
was doubled by a an all-time
high in investors trust in the
residential market and overall
in the economy, resulting in
a multitude of new projects
launched on the market,
including several designed
to have over 1,000 units at
completion.
Thus, SVN’s research shows
that approximately 20,000 units
were in different construction
phases at the beginning of
2020 in Bucharest and its
surroundings, with delivery
dates announced for the
following 24 months.
Taking into consideration
the current medical crisis
and the negative economic
repercussions which will impact
the global and also Romanian
economy in 2020 at least, we
cannot estimate at this moment
how many of these projects will
be completed on time – a better
appraisal could be done after
the circulation restrictions will
be lifted.

Deliveries in Bucharest and surrounding areas

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

16 000
14 832
14 000

12 000 11 272
11 082
10 192 10 110 10 022
10 000 9 533

8 045 8 237
8 000
6 721 6 721 ?
6 000 5 786 5 790

4 000

2 000

Source: SVN Romania, INS

+31.6% +75%

deliveries registered in
estimated absorption
2019 in Bucharest and
rate during construction
its surroundings
phases
compared to 2018
The overall absorption rates
remained high at the beginning
of 2020, with 75%, on average,
from the units sold before
delivery – these good results
were possible taking into
considerations that projects
delivered in the first quarter were
launched in 2019 or 2018, being
long enough on the market to
attract potential buyers.
The high absorption rates were
also achieved in a context of
steady price increases. SVN
Romania’s data show that the
annual prices increase reached
5.2% in March 2020, sellers
expectation not being affected
by the first two weeks of
COVID-19 lockdown.
At the same time, the prices
increase level from March was
the smallest registered in the last
six months, being at the same
time significant higher compared
with the 3% minimum registered
in May 2019 – the lowest
consumer confidence level was
registered that month, after
a spring with constant social
turmoil.

Annual residential price increase in Bucharest (%)

7
5.8 5.8
6 5.3 5.4 5.4 5.2
4.7
5 4.4 4.4
4
4 3.2 3
3
2
1
0
April May June July August September October November December January February March
2019 2019 2019 2019 2019 2019 2019 2019 2019 2020 2020 2020

Note: 2 bedroom apartments, delivered 1980-1990 Source: SVN Romania

+5.2% +9.2% +27%

annual price increase annual wage increase annual increase in Prima
registered in March 2020 in February 2020 Casa credits approved
in Bucharest in Q1 2020
The wages increases, of 9.2%
registered in February 2020
compared to last year (last
official data, national level),
corroborated with the steady
price increases, led to the best
level of purchasing accessibility
in the modern history of the
local residential market.
Thus, according to the SVN
Romania’s index, less than 8.7
years (104 medium wages) were
necessary in January 2020 to
purchase a one-bedroom new
apartment in Bucharest (50
square meters), down from 8.9
(approximately 107 medium
wages) at the beginning of 2019.

Number of years neccessary for purchasing a

one-bedroom apartment in Bucharest (50sqm)

35 32.8
27
30

25
17.8
20 15.8 15.8
14.5
13.3
15 11.6
9.8 9.4 9.8
8.9 8.7
10

0
January January January January January January January January January January January January January
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Source: SVN Romania

The significant economic effects
of the current medical crisis will,
for surely, impact the residential
market, the first quarter of 2020
having all the chances to be the
best one in the current period.
The extent to which different
projects will be affected will be
significant influenced also by
the thoroughness with which
the business plans were drawn
up and by the speed with which
the investors will adapt to the
new market conditions.
+12.1 BN. $
TRANSACTION VOLUME
US ONLY SVN
+200
OFFICES WORLDWIDE
+3.7
MIL. SQ.M. IN PROPERTY
SVN INTERNATIONAL
MANAGEMENT
INTERNATIONAL
SVN INTERNATIONAL

+700
MIL. EUR TRANSACTION
+10
RESIDENTIAL PROJECTS
2,300
NEW APARTMENTS SOLD IN
VOLUME IN ROMANIA IN PORTOFOLIO 2019 DIRECTLY FROM
SVN ROMANIA SVN ROMANIA DEVELOPERS