The Russian multi-unit housing market: a consensus forecast up to 2030

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Written by Andrey Vakulenko – MACON, EECFA Russia

As the residential real estate market in Russia continues to struggle with high key rates and expensive mortgages, the main question in the coming years is not so much the expected rate of reduction, but the speed of this reduction and how quickly market mortgages can replace shrinking preferential programmes. Based on data from ten major think tanks, MACON has compiled a consensus forecast for the multi-unit housing market over the next five years.

Fundamental framework for the housing market in the coming years remains quite conservative

Key forecasters—the Bank of Russia and the Ministry of Economic Development—both predict that inflation will gradually decline, but at high stakes, causing a general economic cooling and minimal growth in the coming years. Expected GDP growth in 2026 is to be 0%-1% annualised, accelerating to 1.5%-2.5% in 2027-2028.

The key rate is forecasted to average 14.6% in 2026, with a further decline to 10.5%-12.5% ​​in 2027 and to around 9% in 2028. In early 2026 a more pronounced rate cut was expected, but by July the trajectory of monetary policy easing had become noticeably more restrained. Inflation is falling at a slower pace than planned, so the Central Bank is also lowering the rate more slowly.

Market mortgage rates will also likely decline, but gradually rather than sharply, which is crucial for the housing market: the cost of financing remains one of the main factors determining home purchases.

Baseline consensus forecast for the multi-unit housing market

Multi-unit housing market forecasts made at the beginning of 2026 by 10 different sources have been complied: rating agencies (ACRA, Expert RA), banks (Alfa-Bank, Sovcombank), institutional companies (DOM.RF, ЕРЗ – erzrf.ru), consulting companies (Yakov and Partners, Strategy Partners, MACON) and the Centre for Macroeconomic Analysis and Short-Term Forecasting (CMASF). The consensus forecast has been broken down to five key indicators: housing completions, new project starts, new mortgages, primary market sales and prices in the primary market. If we combine the forecasts for all five indicators, we get a fairly consistent picture of a gradual recovery cycle:

  • 2026: stabilization – demand is to stop declining, mortgages are to begin to recover, although development activity is to remain under pressure.
  • 2027: start of recovery – mortgage market may grow, demand may increase and developers may begin to start new projects more actively.
  • 2028: turning point in supply and development activity – recovery in demand and new project starts should begin to be reflected in housing completion.
  • 2029–2030: a period of stable growth – the rate of increase for most indicators will likely moderate and the market is likely to gradually enter a stable trajectory.

The logic here is that the recovery of the mortgage market should support demand, growth in demand would halt the shrinkage in development activity and first, new project starts would grow, and after a few years this effect would start to show in housing completion.

Prices in the primary market remain the most stable element of the forecast. There are not enough preconditions for a sharp increase, but there are no grounds for a large decrease either. High construction costs and financing costs will form the lower price limit, while limited purchasing power, amid a gradual decline in rates, will form the upper price limit.

Thus, the coming years are more likely to bring a gradual recovery than a new boom in prices and development. As the market will not return to the previous model based primarily on mass, preferential mortgages and demand will be more and more generated by market lending, the decline in key and market mortgage rates is the main factor in forecast uncertainty. So, the market remains quite sensitive to decisions in ​​monetary and mortgage policies.

Alternative scenarios of the consensus forecast

Since the range of expert opinions on a number of indicators for 2026 turned out to be quite large, we can identify not only a basic consensus forecast, but two alternative scenarios as well. Differences between the two scenarios mainly concern 2026 as in subsequent years forecasts for most indicators converge much more closely:

  • In the pessimistic scenario, demand recovery in 2026 is significantly weaker. Mortgage lending would grow by only 7%, primary market sales would drop by 13% and new project starts would fall by almost 15%, limiting growth for housing construction in 2028.
  • In the optimistic scenario, more rapid monetary easing and the maintenance of the Family Mortgage Programme terms would allow the mortgage market to grow by 17%, and demand by 2%. Developers could increase new project starts by 15% as early as 2026, leading to higher growth in housing completions (about 12% in 2028).

Key indicators in the consensus forecast

Housing completion volumes are to go down by 5% in 2026 and by another 8.5% in 2027, followed by a gradual transition to growth: +3.8% in 2028 and +7.6% in 2029. Thus, 2026-2027 is a correction phase and 2028-2030 is a period of recovery in developer activity. Experts generally agree on the direction of future trends but differ on the estimates of their scale. There are two scenarios for 2028: in the positive one, completion could grow by about 12%, while in the negative one, only by 1.5%.

The highest uncertainty is in new project starts. The difference in expert estimates is based on different assumptions about developers’ reactions to the current market situation: the decision to start a new project is sensitive to demand, the cost of project financing, construction costs, and expectations of future sales. So, the divergence between the scenarios is the most noticeable here. In the optimistic one, new project starts in 2026 could grow by 15.3%, while in the pessimistic scenario, they could drop by 14.5% (the consensus is -4.6%). So, the market is at a point where developers are beginning to look beyond the current decline in demand but are not yet confident in the speed of its recovery. Starting in 2027, experts are much more unanimous in their expectations with a stable growth of 5%-10% per year.

The most positive dynamics are expected in new mortgages where the consensus forecast is +12% in 2026 and +24% in 2027, followed by +12%-13% annually in 2028-2030. However, the forecast for the current year remains less certain than expectations for 2027-2030. The optimistic scenario projects a growth of 17% in issued mortgage loans for 2026, while the pessimistic scenario projects only 7%. The difference is mainly due to the differing expectations regarding the pace of monetary easing and the availability of market mortgages. Going forward, as rates decline, market mortgages should gradually become the primary source of demand.

The consensus estimate is that primary market sales in 2026 can grow by just 1%, suggesting that rate cuts are not yet enough to fully restore demand, but experts don’t expect a further decrease. However, there is also a negative scenario: the possible tightening of the Family Mortgage Programme could lead to a drop in the number of transactions by about 13% as early as 2026. For 2027-2029, the number of transactions is to grow by 7%-9% per year, while it is to slow down to 4% in 2030.

Prices in the primary market appear to be the most stable element of the forecast. Consensus forecasts are for the price per square meter to add 6%-8% per year in 2026-2028, followed by 5%-6% per year in 2029-2030. One could ask why prices continue to rise even with limited demand. On the one hand, growth potential is limited: purchasing power remains a restraining factor, and the level of sales in projects under construction is relatively low. On the other, developers face high construction costs and high project financing. Thus, there is limited room for price reduction, and the most likely scenario is a moderate nominal price growth without a sharp acceleration.

How does the forecast compare with the reality so far?

Based on the results of H1 2026, actual demand almost perfectly matched the consensus forecast. This applies to both primary transaction volume and the mortgage market.

Price dynamics are also relatively close to the forecast range, although the direction is still different: experts anticipated moderate price growth by the end of the year, while the first half of the year showed a nominal negative correction.

Development activity is better than expected. Both housing completions and new project starts showed growth between January and June 2026 despite the consensus forecast for a moderate decline for the year. The discrepancy in multi-unit housing completions is particularly noticeable: the actual dynamics of H1 exceeded even the most optimistic expectations.

Yet, as the first-half-year results are not representative of the year and some indicators exhibit significant seasonality, it doesn’t mean that the forecast needs to be fully revised. It indicates though that market supply is demonstrating greater resilience than hoped for.

Methodological approach to the consensus forecast

The methodology is based on the median of all available forecast estimates for each indicator. The median was chosen deliberately: unlike the mean, it is resistant to outliers and better suited to the real estate market where expert estimates often greatly differ.

To assess the extent to which experts agree with each other, the interquartile range (IQR) is used—the difference between the third and first quartiles of the sample. It shows how widely opinions differ regarding the central range of forecasts. The smaller the IQR, the greater the agreement among opinions and the greater our confidence in the consensus estimate. The assumptions used to interpret the results were: IQR < 3%: very high predictive certainty; 3–6%: high predictive certainty; 6–10%: moderate;10–15%: low; over 15%: very low.

Where consensus estimates are low, the consensus forecast is supplemented with optimistic and pessimistic scenarios constructed based on the upper (third) and lower (first) quartiles, respectively (the optimistic scenario focuses on the upper part of the expert estimate range, while the pessimistic scenario focuses on the lower one). This way, uncertainty can be conveyed through a single figure, and a realistic range of possible market development can be shown.

This article is based on the consensus forecast of MACON, ACRA, Expert RA, Alfa-Bank, Sovcombank, DOM.RF, ЕРЗ – erzrf.ru, Yakov and Partners, Strategy Partners and CMAS. More detailed forecasts for the Russian residential market and other subsectors of construction can be found in the EECFA Forecast Report up to 2028. Orders: eecfa.com

Shrinking Project-Start in Romanian construction market

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Written by Dr. Sebastian Sipos-Gug – Ebuild srl

The value of newly started construction projects in Romania was much lower in the first half of 2026, according to the latest EBI Construction Activity Report Romania, with Project-Start in decline across almost every submarket. “Q1 was relatively strong, but not enough to change the overall downward trend. A combination of economic slowdown, persistent inflation, elevated interest rates, and reduced public spending continues to constrain the market” – says Dr. Sebastian Sipos-Gug.

The total value of commenced multi-unit residential projects experienced the largest drop (-31% compared to H1 2025) as developers face more difficult financing terms and cooling market demand. Home prices are rising more slowly than inflation or construction costs, which also makes residential projects less appealing for speculative development. The ransomware attack on the land registry database also hindered new construction, since it froze property transactions, mortgage contracts, land surveys and construction authorizations for weeks. As the administration will have to handle the backlog created during the shutdown in addition to new requests, the situation is unlikely to improve for the remainder of the year.

Project-Start also fell in case of non-residential construction, though at a more moderate pace (-17% year-on-year). Performance within the submarket was uneven: publicly funded buildings, particularly in healthcare and education, were behind much of the decline as government investment comes under strain from austerity measures and the focus on ongoing NRRP-funded projects. The private sector is showing signs of strong resilience, as evidenced by the detailed breakdown in the report (for instance, the remodeling of mall Palas Iasi started in Q2 2026, at an estimated value of EUR 80mln), and could help the submarket weather this period of poor performance.

The infrastructure submarket fared the best of all three, but it still declined significantly (-14% year-on-year) since new projects took a backseat in favor of completing existing works, with the administration focused on increasing absorption before the August 2026 NRRP deadline. The ongoing government crisis has further complicated both the launch of new projects and the financing of those already underway, but a ramp up of the 2021-2027 EU funding programs could help sustain the submarket by the end of the year. For instance, in H1 2026 construction started on the renovation of one of the oldest railroad connections in the country: Bucharest North – Jilava – Giurgiu North – Giurgiu North Border (55 km), with EUR 423mln co-funded from the CEF 2021-2027 budget.

EBI Construction Activity Report Romania analyses the construction industry on a quarterly basis, including the volume of newly started construction works and the value of projects completed in each quarter in aggregate and by segment as well. It is prepared by Eltinga, Buildecon (creation of indicators and development of algorithms for aggregation) and iBuild (project research and project database). We have renamed our indicators for the sake of easier understanding; from now on we refer to the total value of started/completed construction works as Project-Start/Completion. To get the report, please contact us.

Q2 data pointing to a weakening construction sector in Hungary

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Although Q1 data suggested that early 2026 started well for construction, in Q2 the sector saw a way more moderate investment mood: the level of Project-Start shrank to roughly half of the Q1 level. The latest EBI Construction Activity Report found that projects worth less than HUF 470 billion started – the third lowest value since 2021. The value of construction projects started in Q2 was about 41% lower than the average three-month value​​​​ between 2021 and 2026. Thanks to the outstanding Q1 figures due to Paks 2 and the high number of multi-unit residential project starts, however, the overall level of Project-Start in H1 is still not drastically low: the drop is just over 3% like-for-like. Yet, compared to the first six months of 2021-2024, the decline is between 17% and 45%.

EBI Construction Activity Report Hungary analyses the construction industry on a quarterly basis, including the volume of newly started construction works and the value of projects completed in each quarter in aggregate and by segment as well. It is prepared by Eltinga, Buildecon (creation of indicators and development of algorithms for aggregation) and iBuild (project research and project database). To order the report, please contact us.

We have renamed our indicators for the sake of easier understanding; from now on we refer to the total value of started/completed construction works as Project-Start/Completion.

Building construction: Q2 brought much lower Project-Start than Q1

As per the latest EBI Construction Activity Report, the value of projects entering construction in Q2 did not reach HUF 350 billion, making it the second worst quarter since 2021. Looking at the first half of the year, the Project-Start of less than HUF 1,000 billion at current price has been the lowest level since 2021, falling 10%-27% short of the figures of the first 6 months of the past 6 years. Although Q2 brought lower Project-Start ​​for both multi-unit residential and non-residential buildings, the latter did not post such a radical drop. Overall, non-residential projects worth slightly more than HUF 500 billion entered construction during H1 2026 – the lowest level in the past 6 years and 10%-52% lower than in the same period of previous years.

Among the biggest non-residential projects launched in Q2 2026 was the construction of Airport Service Centre Office Building, Phase 2 of Petőfi Theatre in Veszprém, and several logistics ones such as Phase2 of CTP logistics park in Érd, the next phase of the Weerts Logistics Centre project, as well as the final works of Phase 2 of Kecskemét Campus.

Civil engineering: projects launched at a much lower value in Q2

Owing to the high Project-Start due to the Paks 2 project in Q1 2026, in Q2 the value of Project-Start slightly exceeded HUF 120 billion. Started projects were primarily non-road and non-railway projects, with the largest being the combined cycle gas turbine power plant in Visonta and the hybrid geothermal power plant in Zsana. Project-Start in the road and railway segments continued to be at a minimal level where the biggest project was the Baja southern bypass and junction.

Central Transdanubia overtaking Budapest

Looking at construction projects launched in the past four quarters, the biggest-value ones started in Central Transdanubia, largely due to the M1 motorway expansion that started in Q3 2025. The region’s share grew to 26%, exceeding the capital city (25%). The lowest value of Project-Start was in Western Transdanubia (6%), while the share of other regions ranged between 7% and 11%.

Decline in the value of started multi-unit constructions in the second quarter

According to the latest EBI Construction Activity Report, multi-unit residential Project-Start barely exceeded HUF 100 billion in the second quarter of this year, which was unprecedented in the past two years. But because construction works in the segment started at a great value in Q1 2026, the figures of the first half year in 2026 overall, even at constant price, only show a 35.5% decline like-for-like. Also, started multi-unit residential works far exceeded the first half-year levels of the years between 2019 and 2024.

Several factors are behind the more subdued project starts in Q2. First, some correction was expected after the near-record Q1. Second, developers may have become more cautious with project starts due to government change and moderate demand. Q3 will also bring lower Project-Start, and reduction is expected for the rest of the year. The suspension and review of certain projects that previously received state support under the Home Start Program is also delaying construction start, which may affect 17 000 dwellings. As of now, little is known about the newly announced Wekerle Housing Program (government initiative for affordable rental housing and student dormitories) as its specifics are expected by the end of the year. What is certain is that the program, with EUR 550 million of EU money, can play a great role in the development of multi-unit residential construction and can launch big projects – although its impact may be more pronounced in mid-term.

Looking at individual regions, the biggest decline in multi-unit residential construction starts compared to the previous quarter was in Pest County and the Northern Great Plain, where the value of projects entering construction was 80% and 84% less in Q2 than in Q1 this year, respectively. The decrease was also 68% in Budapest and Western Transdanubia. Similar trends are visible compared to the average quarterly Project-Start ​​for Q4 2024-Q1 2026, with the largest drop in Pest County and the Northern Great Plain region, followed by Central Transdanubia and the Southern Great Plain. Budapest registered the fifth biggest decrease (55%).

Despite the decline, Budapest played a key role in multi-unit residential starts this year as well, with at least 70% of such constructions starting here in Q1-Q2 of the year. Based on the average of the past years, the capital city’s share of Project-Start in the past year was 63%, while Northern Great Plain had 8%, Western Transdanubia and Southern Transdanubia had a 7% share each. In the past one year, works started in the lowest value in Northern Hungary: the region’s share was only 2%.

The biggest projects this year are also in Budapest where the construction of the last buildings of Kincsem Residential Park and the first buildings of Láng Quarter started. In case of rural locations, the largest project was Liget Residential Park in Tatabánya, but it did not make it into the top 10 biggest projects. A similar trend was seen in previous years: the largest projects were in Budapest, with only few rural projects making it to the top 10 list that started near Lake Balaton, in Debrecen or Paks.

The value of completed multi-unit buildings spiked to HUF 180 billion in Q2 2026, the highest Project-Completion in the past 11 years at current price but also considered high at constant price. Q2 saw the completion of several phases of Kincsem Residential Park and Phase 1 of Beluga Bay condominium whose construction started in 2023 and 2024. Project-Completion in the multi-unit residential segment may remain high in the second half of this year as well since Epresliget Residential Park in Debrecen and Újbuda Garden condominium in Budapest are expected to be completed.

Will publicly developed housing keep Turkish residential construction resilient?

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Written by Prof. Dr. Ali Türel and Prof. Dr. Leyla Alkan Gökler, EECFA Türkiye

In H1 2026 Türkiye saw construction costs go up, which is biting into private housebuilders’ profit margins, while house price growth decelerated in real terms. Permit numbers grew in the first half of the year thanks to the public housing schemes of the government. However, Q2 2026 was already weaker in building permits and construction production, so it remains to be seen whether these public programs will keep residential construction strong.

Residential buildings and non-residential development in Ankara – Photo by Prof. Dr. Leyla Alkan Gökler

H1 2026 statistics: construction costs, house prices, building permits

According to the statistics gathered and published by the Turkish Statistical Institute (TurkStat), a comparison of the monthly rates of change in the Consumer Price Index (CPI) and the Construction Cost Index (CCI) for residential buildings shows that construction costs increased at a slower pace than inflation in 2025. In January 2026, however, CCI recorded a considerable increase, while during the remainder of the first half of the year it generally continued to rise at a higher pace than inflation.

A comparison of the monthly rates of change in the Consumer Price Index (CPI) with the House Price Index (HPI) for 2026, published by the Central Bank of Türkiye, indicates that house prices also increased at a slower rate than inflation through June. Looking at the cumulative changes in these three indicators during H1 2026, CPI added 17.76% in June compared to December 2025, while HPI rose by 13.20% and CCI by 20.07%. These figures indicate that house prices grew at a slower pace than inflation during H1 2026, implying a decline in house prices in real terms. In particular, following the sharp increase in the building construction cost index in January 2026 over the rate of increase in house prices, this would inevitably cause a significant decline in profit margins for housing producers.

The number of dwelling units granted building permits reached 513,731 in H1 2026, indicating that construction permits were issued for 35,071 more dwelling units than in H1 2025. In terms of completed dwellings, occupancy permits were issued for 306,687 residential units during H1 2026, representing an increase of 28,990 units compared with the same period of 2025.

New housing developments at the Fringe of Ankara – Photo by Prof. Dr. Ali Türel

Public housing programs

Over the past three years the number of dwelling units granted building permits posted a massive growth, exceeding one million units in 2025, one of the main reasons being the rapid housing reconstruction program undertaken or financed by the government following the major earthquakes of 2023. By the end of 2025, the construction of as many as 455,000 urban and rural housing units, the majority of the post-earthquake housing units to be built, had been completed and delivered to legal beneficiaries.

The Housing Development Administration (HDA, the central government institution) has also been preparing a new social housing program with the intention of providing quake-resistant, low-cost housing with affordable prices, comprising 500,000 housing units since October 2025. Therefore, despite rising construction costs, housing construction continues at a relatively strong pace, with publicly developed housing accounting for a substantial share of building permits. Rise in the building construction cost index at a higher rate can also be related to the effects of the new social housing program of the HDA, and the remaining works of the reconstruction program of earthquake-damaged housing.  

High-rise housing developments in Ankara – Photo by Prof. Dr. Leyla Alkan Gökler

Construction output

Despite the increase in building permits during H1 2026, this momentum has struggled to translate into actual construction output. Calendar-adjusted Construction Production Index declined by 3.1% year-on-year in May and by 6% in June. These falls may be linked to the nearing completion of earthquake reconstructions, as well as the 9.5% fall in housing permits in Q2 2026, although completions have continued to grow since Q2 2025, most likely under the effects of the completed reconstruction of the remaining earthquake-damaged housing. 

With house price increases remaining below the rise in construction costs, the slowdown in construction output suggests that increasing cost pressures and narrowing profit margins are constraining the pace of the private sector’s housebuilding activity. Housing demand is also negatively affected by high interest rates as mortgage credits could be used in only 22% of housing transactions in 2026.

Residential market forecast for Türkiye up to 2028 is available in the EECFA Forecast Report Türkiye. For sample report or orders, contact us.

Traditional residential settlements in Ankara – Photo by Prof. Dr. Leyla Alkan Gökler

EECFA countries in the European Commission’s 2026 Macro Forecast

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Written by Tünde Tancsics – ELTINGA, EECFA Research

Similarly to every summer, ELTINGA (EECFA Research) has now examined how the European Commission sees the EECFA countries. Here is the summary of the major changes in economic prospects between the Autumn 2025 and Spring 2026 forecasts.

The economic outlook has deteriorated across almost all countries in the region compared to Autumn 2025, although growth projections remain positive. Serbia, Romania and Slovenia experienced the most significant downward revisions (-0.4 percentage points), while Bulgaria and Croatia underwent only slight adjustments (-0.05 to -0.1 percentage points). Russia was the only country whose projected growth marginally rose. Growth expectations for the EU and the Euro Area also fell moderately, reflecting a general weakening of economic momentum across the region.

In 2026-2027, average GDP growth is forecast to be positive in all countries, albeit to varying degrees. Türkiye is expected to lead the group with a growth of 3.5%, followed closely by Serbia (+3.35%). Meanwhile, Russia and Romania are forecast to have the smallest expansion (+1.2%). Croatia (+2.6%), Bulgaria (+2.35%) and Slovenia (+2.1%) are projected to perform in the middle of the range. The Euroconstruct member Hungary is predicted to grow by 1.95%, which is above the EU average. Despite the general downward revisions, most of the countries in the region are expected to do better than the EU (1.25%) and all of them will likely surpass the Euro Area (1.05%), maintaining the pattern of stronger growth dynamics in East and Southeast Europe.

Since the Autumn 2025 forecast, the projected growth rate of gross fixed capital formation in the region for 2026-2027 has been revised in both directions. The steepest cuts were seen in Bulgaria, in Serbia and in Romania where projected GFCF growth dropped by 0.8-1.75 percentage points. Meanwhile, Hungary, Slovenia, the EU, the Euro Area, and Russia recorded more moderate downward adjustments, while Türkiye and Croatia saw upward revisions. Serbia is still projected to lead in GFCF growth at 5.15%, followed by Türkiye (4.2%) and Romania (3.2%). Bulgaria (1.25%) and Russia (0.35%) remain at the lower end of the spectrum. The EU (2.1%) and the Euro Area (1.75%) continue to lag behind most countries in the region.

Growth expectations for gross fixed capital formation in construction have been modified across countries where data is available, in both positive and negative directions. The most notable upward revisions occurred in Slovenia where projected construction investment growth increased by 1.55 percentage points to 4.9% (the highest in the group). Romania ranked second in terms of expected growth with 4.85%. Compared to Autumn 2025, Croatia saw a more significant upward revision in its projected growth rate (1 percentage point); the third largest increase in gross fixed capital formation in construction is expected there (3.05%). By contrast, Hungary and Bulgaria experienced the biggest downward revisions, falling to 2.95% and 1.6%, respectively. In the broader European context, construction investment is projected to rise only modestly to 1.85% in the EU and 1.6% in the Euro Area, remaining below most national forecasts in the region.

The Commission’s view on expected construction investment is quite different from ours. Partly it is because we examine the sector from the bottom. For each segment we come up with an individual story and this is how the total construction market is formed. Our latest forecast is in the 2026 Summer EECFA Construction Forecast Reports. Sample report and order

We, at EECFA, are a little less optimistic in East Europe and a little less pessimistic in Southeast Europe than half a year ago. On country level, we expect 4 countries to be in the red until 2027, while truly sizeable growth is foreseen only in Türkiye and Ukraine. The latter is explained by the small base, though.

EECFA 2026 Summer Construction Forecast

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EECFA’s 2026 Summer construction forecast up to 2028 was released on 22 June. Sample report can be viewed at eecfa.com. To obtain the new reports, please contact us

Southeast European construction markets up to 2028

Bulgaria stepped into this year as the 21st member state of the eurozone in the middle of an evolving political turbulence that inevitably impacted the construction sector, most notably, projects that rely on public funding. Nevertheless, according to Yasen Georgiev at Economic Policy Institute (EPI), EECFA’s Bulgarian member institute, Bulgaria’s total construction output is anticipated to increase by approximately 2% on average in the forecast period of 2026-2028. He also notes that “Last year Bulgaria’s construction sector excelled with a strong performance, largely thanks to the residential and non-residential submarkets which fared better than previously predicted. In 2026-2028, however, the country’s total construction output could see a heterogeneous performance.”

Michael Glazer (SEE Regional Advisors) and Tatjana Halapija (Nada Projekt), EECFA’s members for Croatia, point to funding from the EU’s Military Mobility Package (MMP) as a promising source of finance for a wide variety of Croatian construction projects. Transportation ones, both straightforwardly military and dual use, are obvious contenders, so the availability of MMP money should lift output in those civil engineering segments. MMP will likely boost some non-residential segments, too, since it can finance, e.g., factories and logistics centers (perhaps even flight schools?) that have a military or dual-use purpose. This will help sustain total construction output despite rapidly declining levels of finance under the EU’s post-2022-earthquake rebuilding programs and RRF. In non-residential generally, while some developments will affect all segments, specific factors will ensure that output growth varies greatly from segment to segment. The picture for energy construction is also confused, with solid, well-known technologies competing with much-hyped, as-yet-unproven, “hi-tech” alternatives. Residential is buffeted by the conflicting influences of rising prices, declining GDP growth and interventions by the central bank and the government.

Dr. Sebastian Sipos-Gug, EECFA’s Romanian researcher at Ebuild, notes that Romania’s construction market is still in a tight spot. “Growth potential is limited with global and national factors conspiring against it. Recent economic forecasts are more pessimistic; 2026 might see a stagnant GDP, declining real wages and the highest inflation in the EU. This is coupled with the looming specter of national deficit causing high taxation and austerity measures: lower public spending, and wage and hiring freezes for public employees. Not to mention that construction costs, which started evening out in 2025 after the 2022 shock, are now again on the rise due to climbing energy prices and labor costs. The saving grace of construction is the EU programs funding infrastructure projects. Yet, with the NRRP running out in mid-2026, and other programs having an inconsistent performance, the boost they can provide is limited. Adding to all this is a political crisis that could lead to a government change at a critical moment (the end of NRRP absorption, projects phased into other funding sources). But the silver lining: most of these issues should be transitory. By 2028 Romania’s construction might return to growth on the back of improved economic indicators, inflation levels within the target range, a more efficient energy sector, and hopefully, a more stable political situation.”

“Serbia’s overall construction output is still consolidating in 2026 led by the correction in civil engineering, while buildings continue to grow in this forecast” – according to Dejan Krajinović, EECFA’s Serbian researcher at Beobuild. He adds that the performance in the residential submarket remains stable and is predicted to continue to grow with moderate growth rates. Non-residential, on the other hand, is booming, driven by massive investments related to the EXPO 2027, with another year of double-digit growth expected in 2026. Main segments benefiting from ongoing developments are office, commercial and hotel, but health-related construction is also breaking records in 2026. The consolidation in civil engineering is anticipated to end in 2027, with new growth on the horizon in 2028 and onwards. The large-scale infrastructure projects in the pipeline should launch a next big growth cycle in overall outputs. However, the war in the Middle East is already pushing construction costs up and the economic uncertainty and fragmentation are still risks that continue to linger in the coming period.”

“Slovenia’s construction sector’s output was holding steady at just under €6bn in 2024 and 2025 but is set to edge higher in the forecast period, supported mainly by public spending” – says Dr. Aleš Pustovrh at Bogatin, EECFA Slovenia. “Growth is increasingly uneven: residential construction remains constrained by limited supply and rising costs despite strong demand, while private non-residential segments such as offices, retail and industry face cautious investors and only modest expansion. By contrast, publicly financed segments, notably education, health and civil engineering renovation, are providing stability, with infrastructure upgrades, railway investment and energy-transition projects sustaining activity. Transport and utility constructions are shifting from large expansions to maintenance and modernisation, and investment in electricity networks and pipelines is set to rise further due to the energy transition. Overall, the sector is moving into a more stable but slower phase where public policy and infrastructure spending play a decisive role in keeping output on track – as long as public financing remains available.”

Eastern European construction markets up to 2028

According to Andrey Vakulenko at Macon, EECFA’s Russian research institute, the downward trend in Russia’s construction market, which began in 2025, is likely to continue and intensify in 2026–2027. The main reason behind is the combination of a decelerating economy and a prolonged period of high interest rates, which negatively impacts demand, limits the availability of financing and restrains investment activity. Residential construction is experiencing the strongest pressure as the market struggles to find a new balance amid reduced mortgage availability, declining demand and decrease in new construction. Most non-residential segments may also show negative dynamics in the coming years impacted by the slowdown in consumption volumes and business activity, weak household income growth and changes in the direction and scope of government funding in certain segments. Civil engineering will likely stay the most resilient subsector due to the implementation of major transport and energy projects. The planned acceleration of infrastructure construction, the expected growth in the residential submarket and the easing of monetary policy are the conditions for the construction market to return to a growth trajectory in 2028.

“In Türkiye, state involvement in housing development has grown in recent years” – say Prof. Ali Türel and Prof. Leyla Alkan Gökler, EECFA’s Turkish researchers. “Policies to curb inflation have depressed households’ disposable income, creating a serious housing affordability issue for both ownership and renting as home prices and rents have spiked. As moderate-to lower-income households have found it increasingly difficult to accumulate sufficient equity for home purchases, the government has intervened. It launched a large number of residential projects for dwellings that can be bought on affordable terms by households not owning a house in Türkiye. Dwellings will be built by the Housing Development Administration (HDA), the key state actor in housing production in Türkiye. Since HDA has also been involved in rebuilding the about 550,000 dwellings damaged in the February 2023 quake, the share of housing built by the public sector has greatly risen in recent years, while the share of the private sector has been declining from its former share of about 90%. Our latest forecast indicates that total construction output in Türkiye may reach nearly 8 trillion TL (nearly EUR 180 billion) in 2028, at 2025 prices.”

“Ukraine’s construction market exhibited high resilience in 2025 despite the ongoing war and challenging security conditions. While it is recovering and it nominally returned to pre-war levels last year, it was still 40% below the 2021 output at comparable prices.” – notes Professor Sergii Zapototskyi at Uvecon, EECFA Ukraine. “Key growth drivers were commercial, industrial, warehouse, and logistics developments, an uptick in residential construction in relatively safe regions, and large-scale projects aimed to restore public and transport infrastructure. In the coming years, the construction market is expected to continue to grow, supported by post-war reconstruction needs, government housing support programs, and an increase in international funding for Ukraine’s recovery. The greatest growth potential will remain in residential, commercial, as well as industrial and warehousing construction. At the same time, the future performance of the market will largely depend on the security situation, the availability of investment resources, the ability to address labour shortages, and the effectiveness of government reconstruction policies.”

Mixed start to 2026 in Hungarian construction

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As per the latest EBI Construction Activity Report, 2026 did not start badly in Hungary for construction. Activity-Start in Q1 did not substantially lag behind Q1 2025 and Q1 2023, in fact, it slightly exceeded the average quarterly values ​​of these years. At the same time, the start of foundation works of Block 5 of Paks 2 nuclear plant played a major role in higher numbers, adding a more nuanced picture. Projects worth around HUF 740 billion entered construction in Q1 2026. At constant price, Activity-Start did not lag greatly behind the same period of 2025 (-9%), but we have still seen the weakest first three months since 2016.

EBI Construction Activity Report Hungary analyses the construction industry on a quarterly basis, including the volume of newly started construction works and the value of projects completed in each quarter in aggregate and by segment as well. It is prepared by Eltinga, Buildecon (creation of indicators and development of algorithms for aggregation) and iBuild (project research and project database). To obtain the report, please contact us.

Building construction returns to last year’s level

2026 started much weaker in building construction than last year, but the Activity-Start of around HUF 500 billion was roughly in line with the average quarterly level of 2025 and was only 6% below the average quarterly value of 2024. Hence, no major decline compared to the previous two years at current price. Even at constant price, the value of construction projects started in the first three months was close to the average quarterly level of last year, but it was double-digit below the average three-month Activity-Start between 2016 and 2024.

Multi-unit housing construction is still the segment keeping building construction at a higher level. Activity-Start for non-residential construction between January and March this year (HUF 263 billion) exceeded the average quarterly value of 2025, which was considered weak, but fell 33-44% short of the average values ​​between 2021 and 2024. At constant price, this year’s first-quarter Activity-Start has been one of the weakest since 2015.

Biggest started non-residential projects in Q1 2026 comprised several logistics and office buildings such as Phase 3 of Láng-negyed V1 office building and Frontiers Campus office and research centre in Budapest, and the renovation of BorsodChem offices in Kazincbarcika, Phase 3 of CTP VCS5 Logistics Centre in Vecsés, building D of VGP Park Beta logistics centre in Győr, building B of Panattoni Logistics Park in Mosonmagyaróvár, and Phase 1 of Penny Market logistics centre cold storage in Alsónémedi.

Paks 2 boosted civil engineering figures

In Q1 2026, the value of started civil engineering works neared HUF 240 billion boosted by the start of foundation works of Block 5 of Paks 2 nuclear plant, while the Activity-Start in road and railway projects was only HUF 20 billion. Apart from Paks 2, only one civil engineering project got into the largest projects in Q1 2026: the construction of Phase 2 of the industrial park in Nyíregyháza.

Budapest: regional heavyweight again

Budapest continued to be the region with the highest value of construction works started in Hungary with a share of 30% in total Activity-Start in Q1 2026. Based on the four-quarter moving averages, the share of Central Transdanubia was still considerably higher than in previous years thanks to the M1 motorway expansion launched in Q3 2025. Pest County, Southern Transdanubia and the Northern Great Plain accounted for about 9% of started constructions, while the share of other regions varied between 5% and 6%.

Multi-unit home construction still high

After a weaker final quarter last year, this year started with an extremely strong first three months for multi-unit housing. Between January and March, the value of started construction works exceeded HUF 240 billion at current price; the third highest quarterly Activity-Start since 2014. This value is significant even at constant price: only 2017-2018 and last year had stronger quarters.

The great increase in permits last year suggested strong activity at the beginning of this year. The latest EBI Construction Activity Report has found that many large projects have moved closer to planned start recently, also predicting a higher Q2 Activity-Start in the segment. However, there is a lot of uncertainty in the market now as projects within the Otthon Start Program are expected to be reviewed, which may change developers’ plans.

In Q1 2026 the value of completed multi-unit building was about HUF 83 billion, still considered a moderate level. At constant price, it is particularly low. But it comes as no surprise as previous years were characterized by restrained project launches, and the large-scale projects that started last year are set to be completed only later.

Looking at the past four quarters, about two-third of multi-unit building projects entering construction phase concentrated in Budapest, so the capital’s share remains exceptionally high. About 69% of projects started in Central Hungary, 13% of the Activity-Start was linked to Eastern Hungary, while Western Hungary’s share was 18%.

Non-residential construction: after a weaker last year, this year started slowly

Within the subsector, two segments accounted for the majority of the Activity-Start: offices and industry. Offices performed rather poorly in previous years but recovered somewhat in Q1 2026 with their share within non-residential construction going up to 34% compared to 9% in the previous two years. Industrial properties and warehouses continued to account for the other major part despite the decline (their share dropped to 36% against 44-54% in the previous four years). In the first three months of this year, about 9-10% of started non-residential projects were related to wholesale and retail and education.

In 2026, besides the previously mentioned office, industrial and logistics projects, the largest non-residential projects also included Cholnoky Jenő Student Camp in Révfülöp, Rheinmetall RDX explosives factory in Várpalota, Mixvill shopping center in Debrecen, and Phase 1 of MyRA Park M3 shopping park. In 2025, non-residential construction was also characterized by weaker Activity-Start, but several high-value projects were launched such as the special operations barracks in Szolnok, BYD’s assembly hall, logistics warehouse, press plant and lightweight construction plant in Szeged.

In the past three years, non-residential projects reached completion at an exceptionally high value, between HUF 1,600 and 1,700 billion. During this period, Phase 1 of eMAG logistics centre, certain elements of BMW and Mercedes-Benz projects and several logistics projects were completed, including Robert Bosch logistics hall in Miskolc. Activity-Completion indicator may remain at a high level this year as well. The Hungaroring paddock building has already been handed over and several elements of BYD projects, Samsung Göd expansion, and several CATL buildings in Debrecen may also be completed.

Original article: Tünde Tancsics (ELTINGA); English version: Eszter Falucskai (Buildecon)

Croatia’s construction sector: a potential casualty of war

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Written by Michael Glazer (SEE Regional Advisors) and Tatjana Halapija (Nada Projekt), EECFA’s Croatian members

The Croatian economy, including its construction sector, is threatened with serious damage this summer. For now, the pain has not been intense and the danger perceived only vaguely. This could change massively for the worse, though, both as to the actual injury and the perception of danger, by the middle of June and even as early as the end of May. Many factors are at work, but there is only one cause: the US-Israeli-Iran war.

Croatian tourism Summer 2026? – Split, Croatia. Photo by Tatjana Halapija

The cause

Ship traffic through the Strait of Hormuz, which links the Persian Gulf with the Arabian Sea and so with the rest of the world, has fallen 97%. This is twice as much as in any other oil crisis. This means that crude oil and liquified natural gas (LNG) are no longer being transported in anything resembling normal quantities. Nor are sulfur (an important chemical industry feedstock) or helium (used mostly in cooling, e.g., of MRI scanners), which are produced primarily as byproducts of oil and gas extraction and of which Gulf countries are major suppliers. The same holds true for fertilizer, ethanol, graphite, aluminum, iron and steel pellets and glycol, of which, again, Gulf countries manufacture a large portion of global production. (Pistachio nuts, too, but the effect on the world economy is likely to be less pronounced.) Worse, a significant amount of Gulf petroleum, gas and chemical production capacity has been destroyed or damaged (e.g., up to 17% of Qatar’s LNG production capacity) or will be if the war continues (shut downs often damage oil and gas wells and pipelines).

Although Asia is already suffering severely, with some countries mandating four-day work weeks to save energy, Europe and the United States have been spared the worst effects of these developments so far. That is about to change as supplies of oil, LNG and, even more important in the immediate and short terms, their refined products such as jet fuel and diesel become tight after ships in transit unload and private and national reserves are depleted.

Effects on Croatia: tourism, economy and construction

For Croatia, this will likely alter the sources, type, number and ability to spend of the tourists on which the country’s economy in large part depends .Tourists from distant countries will be deterred from flying to Croatia as the price of tickets and the number of canceled flights, already in the tens of thousands, rapidly rise because of enormous increases in jet fuel prices (doubling in Europe since February 28, 2026). Some in Europe may decide to drive instead, but they and tourists that normally drive to Croatia will find that fuel is expensive. Croatia’s languid approach to upgrading and extending its railways means that rail will for the most part not be a realistic alternative, and anyway rail ticket prices will rise, too, because of higher electricity and diesel prices. The upshot for Croatia is that many tourists may decide to completely alter their holiday plans and vacation nearer to home than Croatia, while those that do come will probably not stay as long and have less money to spend than in the past. This would significantly reduce the income Croatia derives from tourism. Croatia’s reputation for high costs, which higher agricultural product prices due to fertilizer shortages will worsen, will likely exacerbate the problem.

The implications for the Croatian construction industry are that hospitality-facility construction will likely fall in the near term, as owners, operators and investors wait to see just how bad and how long the economic effects of the war will be. The wait could be a long one, given that analysts forecast that these effects will last for at least eighteen months and perhaps considerably longer, particularly if the industrial and storage facilities of belligerents and their allies are targeted in a new outbreak of hostilities.

Damage to Croatia’s tourism sector will of course flow through to the country’s other economic sectors, given how important tourism is to Croatia’s economy. But these sectors will likely be hit directly as well. Further stagnation in countries to which Croatia exports non-tourism goods and services is to be expected because of the rise in the costs of energy and raw and intermediate materials, especially but not only plastics and others made from petroleum. This will put further strain on the Croatian economy.

Aggravating this will be a likely rise in the prices of at least some construction materials. Three examples among many are rebar and cement, both of which are energy intensive to produce, and concrete, which uses petrochemical-based additives. And of course transportation costs will rise. One, rather dim, bright spot is that weak economies in countries to which Croatian construction workers have emigrated could encourage them to return home, helping to keep construction costs down. But taken all in all, the growth rate in output of Croatia’s non-hospitality construction sectors is likely to decline and in some cases to go negative. Even government construction projects may be at risk, because payment of energy, agricultural and other subsidies will deplete the government’s cash reserves and reduced economic activity will diminish its tax take.

The future

The question now is not whether the US-Israeli-Iran war will have significant negative effects on construction in Croatia but rather just how bad those effects will be. In the unlikely event that shipments through the Strait of Hormuz resume before the end of May, the effects would be minimized, although to be clear that does not mean that they would be minimal. If the Strait remains blocked beyond the end of June, consequences for Croatia could be quite substantial, since, analysts believe, European reserves of oil, gas and other important products would by then be exhausted. This would cause prices to jump sharply and continually until recession or other events reduced demand to a level that accorded with supply. If hostilities cause additional significant degradation in Gulf region infrastructure, the situation for the construction sector of Croatia, and that of many other countries, could become quite severe.

Croatian construction market forecast is available in the EECFA Forecast Report Croatia. For sample report or orders, contact us.

The next big thing for Serbia: the Belgrade Metro

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Written by Dejan Krajinović, Beobuild Core d.o.o., EECFA Serbia

The construction of the Belgrade Metro stands as the largest single civil engineering project on the horizon and is one of the primary drivers of future economic growth in the coming years in Serbia. For decades, public transport in Belgrade relied solely on buses, trams, and the city railway (BG Voz). Consequently, the development of a comprehensive underground system is expected to have a transformative effect on commuting patterns and travel times. It is worth noting that Belgrade remains the largest city in Europe without a functional underground metro. While the project faced delays for many years, its commencement is now certain, with preparatory works already well underway.

Two massive Belgrade metro Tunnel Boring Machines ready to be shipped from China. Photo by Beogradski metro i voz

Strategic infrastructure: impact of the Belgrade metro project

The project represents a large-scale international collaboration between China and France. The Chinese construction giant PowerChina is tasked with tunnel boring, while the renowned French company Alstom will provide the rolling stock and system management. Recent reports from China confirm that massive, custom-made Tunnel Boring Machines (TBMs) for the Belgrade Metro are ready, having undergone factory testing, and are set to be shipped to Serbia this June. Two TBMs have been constructed for the first phase of the project, specifically for Line 1. These machines will start boring from opposite ends of the line to meet halfway – a strategy that will make the construction process highly efficient and significantly faster, though it demands exceptional coordination and project management.

Line 1 of the Belgrade Metro is divided into two phases: Phase 1 spans 15km and includes 15 stations, while Phase 2 is a planned extension of an additional 6km and 5 stations. The majority of Phase 1 will be underground, with 11km consisting of deep tunnels and 2km constructed using the cut-and-cover method; only 2.1km of the line will be above ground. The city’s topography presents a significant challenge as some stations will be remarkably deep and complex, reaching up to 40m below ground level. The system will utilize driverless, autonomous vehicles and digital signaling, ensuring maximum efficiency, safety, and frequency.

The original plan envisioned the construction of Line 2 (21km with 23 stations) beginning two years after Line 1, allowing the two projects to partially overlap. However, at this stage, it is uncertain whether parallel realization will proceed as planned. The pace of other phases will depend on the progress of Phase 1 of Line 1, but financial considerations will remain the major factor affecting the speed of future development.

Nevertheless, with the start of Line 1, Belgrade has embarked on a long and ambitious journey that will define the city’s construction landscape for years to come. Estimates suggest that Line 1 could cost between EUR 3.5 and EUR 3.8 billion,meaning the project’s scale will have a tremendous impact on civil engineering output from 2027 onwards. This is a key infrastructure development aimed at boosting growth against recessionary trends in the EU and an unstable global economic environment. On the other hand, the looming dangers of energy shocks, high inflation, and global financial instability remain significant risks—not only for this project but for Serbia’s entire construction industry and the economy as a whole.

Serbian construction market forecast is available in the EECFA Forecast Report Serbia. For sample report or orders, contact us.

Top trends to track in 2026 in Romanian residential market

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Written by Dr. Sebastian Sipos-Gug – Ebuild srl, EECFA Romania

Dr. Sebastian Sipos-Gug, EECFA’s Romanian analyst has looked at the trends that are worth monitoring in the residential market in Romania this year. Among them are the construction costs boomerang, the drop in wages and consumption, considerable interest in multi-family buildings, smaller homes and a greater dependence on mortgage loans.

What we saw in 2025

The construction market faced many challenges in the previous year, alongside the entire national economy. While there was a focus on civil engineering, especially when it comes to EU co-funded projects, the rest of the segments lagged behind.

In early 2025, the removal of fiscal facilities for construction employees led to the decline of their net incomes, and an increase in wage-related expenses for companies. Overall, the effect of this measure was an increase in construction costs.

Then came the multiple shocks of the liberalization of energy markets in July, and a VAT increase in August, which pushed inflation upwards significantly, with the CPI reaching 9.88% in September. In a snowball effect, this led to lower real wages and disposable income, which translated into a reduction in private consumption, and, ultimately, means lower demand for residential construction on the short and medium terms.  

The optimism shown in the increased number of permits, and the useful building area in them, compared to 2024, is countered by the decline in the number of completed homes. Thus, while developers might be looking to the future, their actions in the present are lacking, also evidenced by a significant (-21%) annual decline in the value of started construction works in 2025 (source: EBI Construction Activity Report).

What to watch in 2026

Construction costs boomerang. While previously the expectation was that construction costs would gradually decline in 2026, they proved quite resilient to changes in wages, and fuel and construction materials prices remained relatively stable in the past year.  Thus, late 2025 forecasts placed construction costs on a small, descending trend.

The conflict in Iran and its repercussions on oil and gas prices might throw astray these predictions. As of March 2026, oil prices were approaching 2022 levels, and, if they are not reversed rapidly, might have a similar impact on world-wide inflation, energy prices and, eventually, construction costs. A reversal, however, seems rather unlikely at the moment as the damage to energy infrastructure could take years to undo.

To make matters worse, in the past few years home prices grew slower than construction costs, reducing potential profit margins for developers. Added to the decline in real wages, it remains quite unlikely that there will be room for prices to increase alongside construction costs, again similar to 2022, further eating into builders’ financial return potential.

Decline in wages and consumption. Wage growth for 2026 was already forecasted to remain low, underperforming inflation (source NFC – National Forecasting Commission Autumn 2025 Report). Add to that the further shocks now expected from increased energy costs (due to oil and gas prices rising considering the conflict in Iran) and food costs further rising due to increased fertilizer prices, the downwards pressure on real wages is likely to be worse than forecasted, with a slower recovery.

Real wage decline will make it harder to purchase and build new homes, with a negative impact on demand for residential construction. But it could provide a boost to renovation activity, especially when it comes to energy efficiency, as switching homes becomes harder.

High interest in multi-unit residential buildings. Looking at building permits trends for the past decade, single-home buildings have remained relatively stable, while the majority of growth was due to multi-unit buildings. Under price pressure, on the backdrop of restricted wage growth and a contractionary macro-economic outlook, it remains most likely that for the near future we’ll continue to see more interest in the latter. Another connected issue is that of internal mobility, with migration from rural to urban areas in search for education and economic opportunities, increasing demand for denser residential construction.

Smaller homes. While the mean area in permits remained relatively stable between 2017 and 2025, there is a historical precedent in economic downturns leading to smaller homes being built so as to increase accessibility. Since the economic outlook for the year seems to have worsened, this could be the case again in 2026.


Increased reliance on mortgage loans. Despite the highest interest rates seen in a decade, the volume of new mortgage loans increased dramatically in 2024 and 2025. While some of this could be blamed on higher home prices, there remains a major portion that cannot be explained by price or transaction dynamics. Thus, it is quite likely that it reflects a reduced ability to buy homes without applying for a loan. This is also evidenced by the fact that the share of the population currently housed in a dwelling that was purchased with a mortgage loan grew steadily from a low of 0.5% in 2007, to 1.5% in 2024 (source: Eurostat). This could have been further boosted by the expected drop in interest rates as inflation seemed to be heading in the right direction. However, as of March 2026, this seems less likely, as the conflict in Iran would lead to another energy-led inflation event. Nonetheless, with real wages on the decline, mortgage loans will continue to be relied on for boosting home affordability.

Residential, non-residential and civil engineering forecasts up to 2027 can be found in the EECFA Romania Construction Forecast Report. Sample report and orders: https://eecfa.com/