Optimism about Romania's long-term economic growth potential is supported by factors such as investments in infrastructure, Schengen accession, a favorable productivity-to-cost ratio in the labor market, and indications that some Romanians who emigrated abroad are beginning to return home. However, risks remain high, given modest economic growth, a large budget deficit, political instability, and a global context dominated by geopolitical and economic uncertainties.
Key trends predicted by Colliers' analysis:
- Economic Outlook: conomic growth is forecast to exceed 2% in 2025, following a slower-than-expected growth rate of less than 1% in 2024. Challenges include weak external demand, fiscal deficits, and internal risks.
- Political and Geopolitical Context: Romania faces unprecedented political challenges, with political instability expected to persist. Globally, 2025 remains unpredictable, with factors such as the war in Ukraine, China's slowing economy, and tensions in trade and geopolitics.
- Schengen Accession and Infrastructure: Full Schengen membership from 2025 and infrastructure developments, such as new highways, are boosting Romania’s economic prospects and could drive investments and production initiatives.
Sector Highlights:
- Office Market: Low demand for rentals will define 2025, with vacancy rates expected to decline in premium buildings due to limited new deliveries. A dual market is forming, where modern, energy-efficient buildings attract tenants while less competitive spaces struggle.
- Industrial Market: While the industrial and logistics sector may temper due to weak external activity, favorable labor costs and infrastructure expansion support long-term growth. Demand for rentals is expected to stabilize above 2017–2019 levels.
- Retail Expansion: Over 200,000 sqm of new retail space is set for delivery, driven by major players and smaller developers targeting under-served cities.
- Residential Sector: House prices are expected to rise modestly, influenced by stable employment, declining interest rates, and consumer confidence. Discussions around PRS (Private Rented Sector) schemes are gaining traction.
- Diaspora Return: The return of Romanians from abroad is becoming more evident, driven by economic difficulties in Western Europe and improved living standards in Romania. This trend, while still modest, is seen as a potential long-term driver of economic growth.
Romania’s real estate market in 2025 will be shaped by adaptability, as it navigates both local and global challenges while capitalizing on opportunities like Schengen accession and infrastructure investments.
