How the priorities of tenants and home buyers in Bucharest differ
JLL Romania, in partnership with Storia.ro, set out to understand in depth the profile of the tenant in Bucharest comparing it to the profile of the home buyer.
BUCHAREST, 01.08.2022 - 2022 has come with new challenges and the effects of the global context are also felt in the real estate sector. JLL Romania, in partnership with Storia.ro, has set out to understand in depth the profile of the tenant in Bucharest – Ilfov, comparing it to the profile of the home buyer. The analysis was based on socio-demographic and lifestyle characteristics, the current housing situation and the possibility of changing it in the future, as well as the distribution of budgets.
While most potential tenants in Bucharest are looking for 2-room apartments (49%) and studios (33%), buyers declare that they are more interested in houses (31%) and 3- 4 room apartments (30%). The intentions of Bucharest residents differ from those found among Romanians overall: nationally, most buyers are looking for 2-3 room apartments first, and only then houses, as shown in a previous analysis conducted by Storia.ro.
Of those prospecting the residential market in the capital city, 45% of respondents plan to buy a home in the next 12 months, while around a third (32%) are looking to rent a home in the same timeframe. 23% say they are undecided between buying and renting a home in the next year.
"The increased interest in houses or villas is a natural consequence of the trend to value access to private outdoor space (terraces, courtyards, gardens) that has emerged in the pandemic. The period we have gone through has fundamentally changed the way we perceive the quality of life and has reshaped housing preferences", said Andreea Hamza, Senior Director Living Department JLL Romania.
Faced with the choice of Bucharest versus Ilfov, an overwhelming 93% of potential tenants expressed interest in a home located in the capital, a predictable choice given the importance of time spent in traffic to reach the areas of interest in the city. As for potential buyers, 77% prefer Bucharest, while 23% are willing to move to Ilfov.
The most attractive neighbourhoods in Bucharest for renting are Tineretului - Timpuri Noi (30%), Titan (28%), followed equally by Dristor, Unirii and Victoriei - Romana - Universitate, ticked as a desirable options by 27% of respondents.
As far as buyers are concerned, the top is different, placing Titan neighbourhood in the hierarchy of preferences (23%), followed at a short distance by Drumul Taberei (21%) and Tineretului - Timpuri Noi (20%). Equally, Militari, Dristor and Berceni neighbourhoods were mentioned in the next places.
Among the common reasons justifying the attractiveness of these areas are easy access to the underground transport network and the proximity of large parks. The results of the survey highlighted the desirability of central areas such as Victoriei - Romana - Universitate or Unirii, where respondents want to live, but the restrictive purchase prices lead them to opt for renting. Thus, 27% of the respondents want to rent in ultracentral neighbourhoods, while only 11% consider buying a house in these areas.
"Since Bucharest is one of the most important real estate markets, we thought it was relevant to put a magnifying glass on its particularities and thus come up with valuable information to complement the research we are already doing at national level. We hope that the observations will be of help to both buyers and tenants who want to make the best real estate decision, and to developers and real estate agents who are looking for practical ways to meet their expectations", said Monica Dudau, Marketing Manager Storia.ro and OLX Imobiliare.
There are also neighbourhoods that have scored similarly and positively both in the top of buyers and tenants, such as Drumul Taberei, Berceni and Bucurestii Noi.
At the opposite pole, the least attractive neighbourhoods, which did not exceed 7% in the distribution of interest of those looking for housing, are Giulesti, Grivita, Rahova, Expozitiei and Giurgiului.
The results of the study also reflect which are the most important aspects considered in the decision-making processes of either renting or buying a house.
Those who intend to rent choose this option to the detriment of buying motivated cumulatively by the following factors: financial constraints or related to taking out a bank loan (81%), the desire for greater flexibility in terms of residence (72%), the availability for rent of housing corresponding to their standard of comfort (60%), but also the decision to invest savings for purposes other than a real estate purchase (56%). At the same time, half of the respondents claim that they cannot find properties for sale that suit them.
On the other hand, for 88% of respondents, the decision to buy is primarily motivated by the desire for rental stability, which is not guaranteed in the volatile rental market. Another reason is the accumulation of the amount of money needed to buy, an indicator that in many cases, the status of tenant is not a personal choice, but a provisional one conditioned by the lack of budget for the purchase of real estate. This reason is followed by another financial motivation: the similarity between the bank rate for the mortgage and the rent (61%), which justifies the purchase commitment. Another significant percentage is the one of those who say they are motivated to buy for investment purposes (54%).
The main factor that drives customers to either buy or rent is the monthly household income. Thus, the higher the household income, the higher the intention to buy rather than rent. Almost two thirds (63%) of people living in households with incomes between 4,000 and 8,000 lei are more interested in buying, while for 69% of people with monthly household incomes below 4,000 lei the most convenient solution is renting.
Another important factor in the decision process is age, which is directly related to monthly income and marital status. More than half of the respondents who are under 34 years of age plan to rent, while among those over 34 years of age, only a quarter plan to rent a home.
There is also a significant correlation between the number of household members and the intention to buy or rent a home in the next year. The higher the number of household members, the higher the intention to buy. More than 90% of couples with children want to buy a home, as do 60% of married or unmarried couples living together but without children. By comparison, more than 60% of people living alone prefer to look for a rental property.
The survey also set out to analyse relocation intentions according to current housing status, and the results reflected that 58% of people looking to rent already live in rented accommodation, 25% live with parents or other relatives, while only 7% own a home. As for those interested in buying, 43% already own a home and want to upgrade, 32% live to rent and 20% live with parents or relatives.
The survey was carried out between April and June 2022, on a sample of over 1,470 people prospecting the market, predominantly under the age of 55. Most of the respondents (67%) are graduates and more than half (54%) work in the private sector.
JLL (NYSE: JLL) is a leading professional services firm that specializes in real estate and investment management. JLL shapes the future of real estate for a better world by using the most advanced technology to create rewarding opportunities, amazing spaces and sustainable real estate solutions for our clients, our people and our communities. JLL is a Fortune 500 company with annual revenue of $19.4 billion, operations in over 80 countries and a global workforce of more than 102,000 as of June 30, 2022. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit jll.com.