Between 14th and 21st September, 2021, we conducted our “Fair Rental Survey”, which is aimed at understanding the expectations and differences between local residents and foreigners when it comes to renting in the city.
The rent prices have been steadily increasing over the past 5 years in Romania and at the time of writing, Cluj-Napoca is the most expensive city in the country, even compared to the capital, Bucharest, when it comes to rent.
|Rent Per Month||Bucharest||Cluj-Napoca||Difference|
|Apartment (1 bedroom) in City Centre||421.42 €|
|Apartment (1 bedroom) Outside of Centre||289.32 €|
|Apartment (3 bedrooms) in City Centre||763.79 €|
|Apartment (3 bedrooms) Outside of Centre||483.88 €|
According to Numbeo, the world’s largest database of user contributed data about cities and countries worldwide, the average price of a 3-bedroom apartment, outside of the city centre, increased from €227.69 in 2010 to €500.45 by the end of 2020.
The increase in rent, is attributed to both an increase in demand as well as general standards of living and amenities in the city. During the COVID-19 Pandemic, price increases slowed down a little, but Cluj-Napoca still has some of the most expensive rents in the country and it seems that the pandemic only resulted in a short freeze on rent increase, but since recovered and continues to grow at a steady pace.
What our Survey Revealed
Our survey is aimed at understanding what the local population of Romanian residents are willing to pay when renting an apartment and then comparing that to what foreigners are willing to pay towards rent. For most foreigners travelling from other countries in Europe, the rental price in Cluj-Napoca or Romania in general, can seem a lot lower than that of their home states and countries.
This has led to the foreign community often over-paying for apartments and in some cases, reports of local residents being less favoured as tenants over foreign tenants in terms of the potential to generate more income from the same property.
The survey ran for 7 days and was posted in a number of Facebook groups, as well as on the ClujXYZ.com website.
There were two posts, one in English and directed at an audience primarily made up of foreign students and expats, the other post was written in Romanian and shared in rental groups, primarily made up of Romanian citizens. The Romanian-targeted post, also requested that only Romanian citizens respond.
Included in each post, was a “scenario apartment”, which specified a typical example of an apartment in a residential neighbourhood and in good condition. The post was listed in the style of an advertisement without any photos.
The Romanian-targeted post received a total of 2,516 responses recorded over the course of the 7 days that the survey ran.
The Foreign-targeted post received a total of 504 responses, which was expected, due to the fact that there’s a much smaller audience which qualifies to respond. In order for this data to be displayed clearly when compared to Romanian responses, we counted single vote as a count of 5.
When submitting responses, people were asked to take into vote on what is “affordable”, which is aimed at taking into consideration other typical costs of living.
Romanian and Foreign Responses
Below are the responses for the “scenario apartment” which would typically be considered a modern-furnished apartment in an area of the city which is well-connected to public transport and also located close to a major grocery store.
2-Room Apartment with 52sqm, 3rd floor in block of 5 floors on Calea Manastur (near Kaufland).
- PVC Windows (Termopane)
- 1 Open Balcony
- Air Conditioning
- Kitchen appliances purchased in past 5 years (Microwave / Refridgerator / Stove)
- 32″ LCD TV
- “Ikea” style furniture throughout apartment.
- Double bed in bedroom
- Extendable sofa in main room
- Separate kitchen, with small dining space
- Laminate Flooring
- Freshly painted walls (white)
- Central Heating (Centrala)
- Bills not included
- No Parking Space
The results indicate that the most popular price range for the Romanian responses was €250- €275 (~€4.80 – €5.20 / sqm) with a total of 791 individual responses and €275 – €300 (~€5.20 – €5.76 / sqm) for foreigners with a total of 195 responses (5:1 = 973.05 responses).
According to the data, foreigners are comfortable paying an average of 9% more than locals when it comes to the most popular price range.
However, when looking at all of the submissions, foreigners were more comfortable paying over €350 for the scenario apartment, compared to locals.
The total number of collective votes from locals for rent prices between €350 – €500 was 71, where with foreigners, it was 118 (5:1 = 588.82). The price range of €350-€375 was the second most popular choice for foreigners and €210-250 for locals.
This reinforces the perception, that foreigners are willing to pay more for the same conditions, over locals.
Salary vs Rent
The current average salary, after tax in Cluj-Napoca, according to Numbeo, is €778.48 (3,851.12 lei), meaning that for the scenario apartment, locals feel that allocating between 32% – €35.5 is affordable.
When comparing this to foreigners, if receiving the same salary as that of the local community, they would be spending between 35% – 38.6%, effectively leaving them with around €478 for bills and other monthly expenses.
Rent vs Income over 10 years
|Year||wdt_ID||1 Bedroom Apartment (Outside Centre)||1 Bedroom Apartment (Centre)||3 Bedroom Apartment (Centre)||3 Bedroom Apartment (Outside Centre)||Salary (After Tax)|
Data Source: Numbeo Historic Data.
In the past 5 years (2016-2021), the price of a 1 bedroom apartment outside of the city centre, increase from €219.12 per month to €294.73 (29.43%) and in the centre from €300.84 to €411.65 (31.10%), whereas wages increased from €475.90 to €778.48 (48.24%).
The highest average salary increase in the same 5-year period was between 2018 and 2019 by €85.69 (14.23%), the rent price for a 1-room apartment outside the city centre increased from €264.72 to €287.71 (8.32%).
However, as salaries in Romania are paid in the local currency, RON (lei) and rent is typically charged in euro, the exchange rate is also an important factor.
On October 27th 2016, the exchange as 4.49 lei / €1.00. 5 years later, the new exchange rate is 4.94 lei / €1.00.
If we take the exchange rate from 2016 and today’s rental price for a 1-room apartment outside the city centre, the difference being lost to the degradation of the Romanian currency against the euro is 129.47 lei (€26.20) (1,291.81 lei / 1,421.28 lei).
Generally speaking, rental prices and income have been increasing over the past 11 years at a steady rate, but. at the same time, the Romanian currency has been weakened against the euro, which adds additional strain to each household or tenant.
According to the survey, foreigners are still more comfortable to pay more than locals and this is likely due to the fact that foreigners have less knowledge of the Romanian rental market, expectations and also what the average income is for Cluj-Napoca.