Twenty twenty-five sees a decline in Bucharest home sales, while property prices continue to escalate during the first half of the year.
Headline: Residential Market Trends in Bucharest and Ilfov County Show Fewer Transactions but Higher Prices in H1 2025
In the first half of 2025, the residential market in Bucharest and Ilfov County has witnessed a significant shift. While transaction volumes have declined, prices have continued to rise, creating a unique market dynamic.
Transaction Volumes Drop
Compared to H1 2024, transaction volumes dropped by approximately 10% in both Bucharest and Ilfov, suggesting a market slowdown or recalibration of demand, particularly in Bucharest where new home sales fell sharply.
Prices Continue to Rise
Despite the decline in sales, prices have continued to rise strongly. The average selling price in Bucharest reached approximately €2,108 per usable sqm, marking a 9.3% growth. This increase is primarily due to inflation, rising construction costs, and anticipated tax hikes such as the increase in VAT for new homes from 19% to 21% effective August 2025.
Limited New Housing Supply Intensifies Price Pressures
Although overall supply increased slightly (9.4% in Bucharest), new deliveries in Q2 2025 dropped drastically—58% in Bucharest and 74% in Ilfov compared to Q2 2024—constraining available inventory and fueling price growth.
Ilfov County Attracts More Transactions
In contrast to Bucharest, transactions in Ilfov slightly increased due to more competitive prices and available land for development, making it an attractive option compared to the more expensive and supply-restrained city center of Bucharest.
Buyers' Behaviour Influenced by Stable Interest Rates and Expectations of Further Price Increases
Buyers' behaviour has been influenced by stable interest rates and expectations of further price increases, prompting some to accelerate purchases, such as before the VAT hike in August, which caused a record sales surge in July 2025.
Location-Specific Demand Trends
Northern Bucharest, notably the Pipera area, has gained momentum due to its proximity to modern amenities, educational institutions, shopping centers, and natural green spaces. This area is attracting premium residential investments and further development projects planned for late 2025 and beyond.
In summary, the Bucharest and Ilfov residential market in early 2025 is marked by fewer transactions but higher prices, primarily influenced by inflation, tax policy changes (especially VAT increase), sharply reduced new home deliveries, and shifting demand favouring suburban Ilfov and premium northern Bucharest neighbourhoods near amenities.
[1] iO Partners, Market Report H1 2025 [2] Romanian Real Estate Market Report, Q2 2025 [3] Bucharest Property Market Trends, Q2 2025 [4] Romanian Government Announcement on VAT Increase for New Homes [5] Mortgage Applications Surge in July 2025 Ahead of VAT Increase
Investors might find it appealing to consider the real-estate market in Ilfov County, which showed a marginal increase in transactions due to its competitive pricing and available land for development, offering a potential opportunity for investing in housing.
The ongoing rise in housing prices in Bucharest and Ilfov is fueled not only by supply shortages but also by factors like inflation, increased construction costs, and anticipated tax hikes in the real-estate sector, particularly regarding the VAT for new homes.
