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Gabriel Voicu
Vice President
SVN Romania

05 July 2021

SVN is a commercial real estate advisory based in the US, whose activities extend across a large array of property areas such as hospitality, industrial, land and development, retail etc. Most of these fields are covered in SVN’s business offer in Romania, where the company has been present since 2019. Cosmopolis is the largest project handled by SVN Romania, with a total of 13.000 units planned and about 30.000 inhabitants.Other large projects from SVN Romania’s portfolio include Liziera de Lac, with approximately 4,500 houses planned, and Novopolis, in Constanta, with approximately 5,000 units planned.


SVN Romanian functions as a franchise of the US mother company. How relevant is this market for the overall group, and what are the key SVN services offered here?

Indeed, SVN is one of the largest US-based realtors by turnover. It has 200 offices across seven countries and in 2020, the SVN group brokered transactions amounting to around EUR 12 billion. 

SVN Romania is a newcomer but we rely on a solid team. We brought the franchise to Romania in 2019, and in the same year we hit the top 5 Romanian real estate consultants list with a EUR 5.07 million turnover. In 2020, our growth rate was almost 13% - we registered a turnover of EUR 5.75 million. Most of our revenues come from residential, with around 4.000 transactions in the last 3 years. In terms of transactions per consultant ratio, we are 4 to 5 times larger than the next broker on the Romanian market. It is important to mention that, in the Bucharest area, the annual transaction rate is approximately 45.000. Other revenue streams come from Property Management,  Research and Valuations as well as the Commercial department. 

We are now experiencing a very effervescent residential market, everybody wants a piece of the pie. What were the turning points in the Romanian residential market based on your 10+ years experience, and what are its key features now?

The defining moment was the 2009 economic crisis. The bubble was created by speculative investors, which accounted for 90% of the buyers while the rest of 10% were the end users. Today, the ratio is reversed: 85 to 90% of transactions are sealed by end users while the yield investors account for only 10 to 15%. In 2011 to 2013 the foreign investors were very much lacking from our landscape and most of the development projects were driven by local investors. The segment started to readjust entirely. From noticeably big ground surfaces in 2009 – a prejudice inherited from our communist era – we went back to more efficient spaces in 2011-2013. 

A plateau was reached in 2016 – 2017 when price fluctuations and transaction rate had gradually smoothed out. The First House governmental program combined with the VAT rate cut to 5% from 19% for residential transactions worth up to approx. EUR 90.000 (to be changed to up to EUR 140.000) were the main engines of this recovery.

Romania is the EU country with the highest density of people per built sqm and there was hope that the 5% VAT would lessen the issue. What was the impact you noticed after the Government postponed its implementation? 

First off let me note that our industry feels disappointed, especially end users and investors. Delaying the VAT cut has disillusioned both. We had to spend a great deal of effort to persuade clients not to withdraw from transactions. Some of them lost their down payments, and those who did get their money back missed out on enjoying a new house. On the other hand, the overnight regulatory changes lead to a loss in investors’ trust. Investors love stability. The ones that were planning to come to the country are now reconsidering, while those already invested had to hit the brakes. Moreover, the law-induced slow-down in our market generates chain reactions in other industries, such as furniture manufacturing, human resources, building materials and so on. Hoping that 2022 will see this law put into practice.


On the upside, we do not see a drop in the overall number of transactions, on the contrary. Compared to the pre-pandemic start of 2020, the first quarter of 2021 brought an increase of 35.5% in closed transactions in Bucharest and its surroundings (Q1 2021 VS Q1 2020) and a 21.5% increase at a national level, according to official data. 


Housing prices went up steadily in the past three years. How do you expect residential prices to evolve in future, and what do you think will stimulate the demand going further? 

Real estate in Romania is made of two sectors, the pre- and the post-communist period. The new market price surges are cost-based (land, labor – increasingly foreign labor -, building materials, developing costs, etc.). The old market follows suit, although somewhat unreasonably so. Globally, the old market has not reached growth rates higher than 10-15%, but some geographic areas also experience shrinking. In Romania we have not witnessed an annual growth higher than 10%, which is a natural growth due to the costs I had mentioned earlier. 

The pandemic has somewhat shaped the client’s behavior. People migrate back to the outskirts so that they can enjoy bigger surfaces, gardens, and work from home. The demand shifted naturally to bigger apartments and houses, but the interest in central areas will always stay alive. Invariably, people’s interests are linked to the transport and educational infrastructures, in the zones they choose to live in, but also to their short to medium-term circumstances.

Do you think the 10% growth is here to stay? 

In terms of growth, we should investigate the macro indicators of a given market. Geographical or regional discrepancies are not necessarily trend setters across the board. At a national level we will have a one-figure growth. Let us take Cluj, for example. It is a booming IT hub, and so the office market has soared at a growth rate of 15-17% or even higher. Alluring cities, such as Brasov, Constanta, and Iasi had an above-average price growth. All in all, I expect Romania will have a moderate and natural real estate price growth of up to 10%.

Back to SVN and its future - what are your objectives for the next two to three years? 

We want to consolidate our leading position in the Romanian residential market while expanding our project portfolio. Our target is top three by 2025 and we will do so by developing our Research and Valuations, Retail, and Offices segments. Overall Romania is an emerging market with a huge appetite for growth. In the years to come, we expect a steady growth in the IT&C Offices area while Residential will remain sustainably interesting for investors.

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