Romania’s construction volume index plunged by 10.3% y/y in August, contributing to the 4.7% y/y decrease calculated for the whole January-August period, according to the statistics office.

The residential buildings segment of the market posted the deepest decline (-42.1% y/y in August and -31.0% y/y in January-August), but this was from a high base after the sector boasted stellar growth rates in 2017 (+70.4% y/y). The civil engineering segment posted positive performances this year, both in August (+12.7% y/y) and in the ytd period (+11.7% y/y), but this is a slim improvement after years of decline.

From a broader perspective, the average residential building index calculated for the rolling 12 months ending August was 12% below the pre-crisis 2018 benchmark, while the decline was 24% for the non-residential buildings segment and 36% for the civil works index. The volume of works financed from state budget or European Union funds (civil works) thus still lagged by more than one-third behind the pre-crisis period when the GDP was 20% smaller.

The decline of the residential buildings segment is confirmed by the decreasing number of deals in the real estate market: in September, only 42,522 properties were sold in the whole country, 26% down y/y according to the cadastral agency ANCPI, as quoted by Ziarul Financiar. The number of deals had contracted by 29% y/y to 40,576 in August.  In Bucharest, where the real estate sector saw the most visible expansion last year, the number of deals roughly halved on the year to 2,205 in September.