Bucharest"s real estate market, flooded with home rental offers

Alina Toma Vereha

March brought with it an "explosion" of the number of the apartments put up for rent in Bucharest. The number doubled compared to March 2007 and grew 60% compared to March 2008, according to a monthly report made by AnunţuriParticulari.ro. The increase is caused by the fact that home sales are still deadlocked, as well as by the increasing numbers of tenants who are relocating. Homeowners who failed to sell their apartments are now trying to put them up for rent. At the same time, the corporate relocation process that has begun last autumn is now making its presence felt on the residential segment as well. Forced by dwindling revenue or using the economic crisis as an excuse, tenants are now trying to force homeowners to cut their rent, also using the depreciation of the leu as an argument. Homeowners who kept their prices unchanged have been left with their homes empty and they are now putting them on the market again, the press release sent to our editors says.

The largest number of offers is for 2-room apartments, where the numbers are impressive. Over 3200 new 2-room apartments came on the market in Q1. This increase of the supply has caused an drop in rent prices for all types of apartments and in all areas of Bucharest. The average rent for homeowners dropped below 2008 levels and sometimes even below 2007" prices for some apartments.

The average rent for two-room apartments is 467 Euros/month, whereas in March 2007 it was 454 Euros/month, and 577 Euros/month in March 2008. The drop of rent prices is affecting first and foremost two-room apartments, because these make up the bulk of the market"s supply.

The average rent for studios in March 2009 reached 320 Euros/month, very close to the March 2007 levels, when the average rent was 303 Euros/months, whereas one year ago, the rent for a studio would be 381 Euros/month.3- and 4- room apartments are among the least sought for by tenants, as the drop of rent is more significant for these apartments. Prices for such types of apartments have returned to levels similar to those in the autumn of 2006. The average rent for three rooms is 662 Euros/month, and the rent for four rooms is 1.018 Euros/month.

The large number of apartments up for rent, the drop in earnings and the depreciation of the leu against the Euro are factors that will cause rent prices to continue their downwards trend.