Directimo: The price pressure for new homes leads the market to smaller, but qualitative dwellings

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Directimo, the platform for the new home purchases, which offers free access to the best offers for 300 residential complexes and over 50,000 new apartments in Bucharest, was launched on the market today following an investment of EUR 1 million. Directimo is a search engine dedicated to the new residential market, with its own database and technology based on artificial intelligence (AI).

In the first three quarters of 2021, Directimo specialists selected over 50,000 new offers, on the upper segments of the market: medium, medium-superior, premium and luxury in the Capital. After monitoring the market for nine months, the conclusions of Directimo specialists for the four market segments are:

  • the high- quality apartments become inaccessible to the general public: only on the middle segment there are still available two-room units, which fall within the ceiling of 5% VAT, respectively 450,000 RON, without including the parking space. The median usable area of ​​these units is 53 sqm, and the median price per unit is 89,000 EUR + VAT + parking space.
  • on the upper middle segment, the two-room apartments have an average usable area of ​​54 sqm, the median price reaching the level of 111,600 EUR + VAT + parking space.
  • Regarding the premium segment, the average area increases to 57 usable square meters, and the average price per unit reaches 148,000 EUR + VAT + parking space.
  • in the exclusive areas of the Capital, on the luxury segment (Primaverii, Kiseleff and Aviatorilor areas), the median areas reach 81 sqm usable for two rooms, while the price of such a house has exceeded the threshold of 700,000 EUR + VAT + parking space. On the one hand, this can be explained by the significant increase in demand: the number of millionaires has increased in the pandemic from 32,000 to over 47,000, according to a recent report issued by Credit Suisse. On the other hand, the supply is extremely low in the context of land scarcity and difficulties in the authorization process.

“The market is affected by inflation and by the explosive increase of the construction costs in the past year. Under these circumstances, we estimate that a new segment, correlated with the Western market, will be developing – the smart economy dwellings, which are efficient in terms of space use and are optimized from the architecture perspective, so that they satisfy the solvent demand on the market”, said Matei Maloș, CEO Directimo.

At this point, there is a significant deficit of double studios with usable areas of 45sqm, two-room plus study apartments of around 65 sqm and 80-90sqm four rooms apartments, plus terraces.

As for the four-room apartments, the median surface exceeds 100 sqm of usable area, so that they are financially unaffordable for a family with two children and average incomes.

The smart economy type of units can generate better performance for rental, and also a high quality level, amid the competition and the mounting pressure on costs.

 

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