Romania’s residential market posted record apartment sales in July as buyers rushed to finalize transactions before the removal of the reduced VAT rate and the increase in the standard VAT from 19% to 21%, according to real estate consultancy Colliers. The VAT change came into effect as of August 1, driving a surge of last-minute deals in Bucharest and other major cities.
Bucharest recorded just over 5,000 apartment sales in July, the third-strongest month in the past two and a half years. Nearly half of these transactions were concentrated in Districts 3 and 6, reaffirming their role as the city’s main residential development hubs.
Cluj-Napoca also posted a standout performance, with more than 1,000 sales – the highest monthly total in three and a half years. By contrast, Timișoara saw only a modest month-on-month increase, while Iași registered a slowdown.
Data for the first seven months of 2025 reveal sharp contrasts between regional markets. Bucharest reported a 7% drop compared with the same period in 2024, Timișoara declined by 3%, and Iași fell by 25%, while Cluj-Napoca recorded a 14% increase. Nationally, sales volumes remained broadly in line with last year.
The July figures also reflect numerous pre-contracts signed before the VAT change took effect, which remain eligible for tax relief if properties are delivered by August 2026.
“Essentially, this mechanism created a window of opportunity for both buyers and developers, speeding up negotiations and the signing of agreements ahead of the deadline, in an effort to avoid the additional costs generated by the VAT increase,” explained Gabriel Blăniță, Associate Director | Valuation & Advisory Services, Colliers Romania.
“Traditionally, sales peaks were recorded in December, when buyers and developers sought to close transactions before new legislative changes came into force on January 1. This time, however, the rules of the game changed mid-year, and the market had to adapt on the spot. This shift in timing triggered a sudden wave of interest and significantly accelerated the pace of transactions, demonstrating the market’s ability to respond swiftly to new fiscal conditions,” he added.
Most of July’s buyers were individuals purchasing homes for personal use, as legislation since 2023 allows the reduced VAT rate for only one property per buyer.
The VAT increase is expected to add pressure on housing prices, though the extent will depend on how costs are shared between developers and buyers. Some developers have pledged to absorb part or all of the higher tax to sustain sales momentum through year-end.
Still, Colliers warns that July’s exceptional peak may not be repeated soon, with new taxes, higher property levies, and a slowing economy likely to weigh on demand.
irina.marica@romania-insider.com
(Photo source: Tapanakorn Katvong/Dreamstime.com)
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