Rental Reality Check in Cluj-Napoca: The Domino Effect of Inflated Student Housing Costs

Published by:

Aaron Roberts

Published on:

October 2, 2023

Last Updated:

Oct 2, 2023 @ 5:53 pm

Tags:

average salary Cluj, Foreign Students, housing conditions, housing crisis, inflated rents, living costs, local affordability, market distortion, overpriced rents, rental exploitation, rental market, student housing, tax increase, unregulated market

Short link:

https://clujxyz.com/zdhqmn

The spotlight has been cast on Cluj-Napoca's rental market following the listing of a markedly overpriced apartment at the meeting point of Strada Donath and Strada Taietura Turcului. Despite its alarming condition — with mouldy, damaged tile in the bathroom, and furniture seemingly untouched since the 1990s — the apartment carries a price tag of €250 per room, culminating in a hefty €500 per month for two rooms.

Hello, a friend of mine is renting a very cute apartment super close to the city center: "Apartment for RENT! 2 rooms, 2 hallways, 1 bathroom, 1 kitchen, and 1 terrace with a great view of the city. It is situated in Grigorescu Neighborhood (the safest neighborhood in Cluj. It is quite close to public transportation (very close to the bus station and close to the train station), supermarkets (Profi and Mega Image), banks (Banca Transilvania), parks (2 smaller parks across the street, 12 minutes away from luliu Hatieganu Sports Park and 20 minutes from Central Park by foot), and very close to Hoia Forest. It has a dentist's office in the building and a medical office across the street. There is a biking lane in front of the building and places to park the bike. The apartment is on a walkable distance to the City Center (about 25 minutes by foot, 10 minutes by bike, and 5 minutes by car). It is fully equipped (furniture, bedsheets, towels, washing machine, dishes, fridge, toaster maker, hairdryer, iron, TV with cable, very good wift, warm water, new central heating system). Price: 250 euro/month per room (negotiable). You can make changes to the rooms, furniture, colors of the walls, etc. make it as homey as you like.

A Wide Gap Between Price and Value

While the advertisement paints a charming portrait of a “cute” apartment in a prime location, respondents to the listing have been quick to highlight the discord between the asking price and the real value of the property. One pointed comment reads: “#overpriced as hell!!! For that furniture, you shouldn’t pay more than 200 euro per apartment!!!!”

Another user, detecting the hidden message in the listing, adds: “I love the sentence ‘You can make changes to the rooms, furniture, colors of the walls, etc.' Which translated means: We won’t invest a cent in necessary improvements; that's your responsibility.”

The Ripple Effect of Targeting Foreign Students

It’s primarily foreign students who fall victim to these exorbitant rents, a practice that unfortunately sends shockwaves through the broader market, affecting local affordability. As one user insightfully notes: “I'm renting an apartment in Liverpool which is cheaper than this.”

Distorted Market Dynamics

This trend of charging foreign students inflated rents inadvertently reshapes the market, normalising unjustifiably high prices and making housing unaffordable for many locals. The average after-tax salary in Cluj-Napoca stands at approximately 4764.16 Lei (€957.68). With an average rent of 2,916.80 Lei (€586.33) for a three-room apartment outside the city center, paying €500 for a subpar two-room apartment consumes an overwhelming percentage of the average person’s income.

In this context, with residents spending a substantial portion of their salaries on rent, the expected tax increase in Romania in 2024 further exacerbates the situation. The impending hike will see taxes on certain quality-of-life services jump from 5% to 19%, placing additional financial strain on residents.

A Misleading Employment Landscape

Fueling these rental expectations is the misconception that most residents in Cluj-Napoca are employed in the lucrative IT sector, which is known for higher salaries. However, this isn't the reality for many, leading to a market skewed against those earning average or below-average incomes. The current minimum salary before tax is 3,300 (2079 lei in-hand) and set to increase to 3,750 in 2024, but there will also be changes to the taxation for employees.

Time for a Market Correction?

Unchecked, the current rental trends in Cluj-Napoca risk deepening the housing affordability crisis for all residents, not just students. As the city continues to grow as an educational and cultural hub, there's seemingly an urgent need for regulatory intervention. This would protect both foreign students and locals from predatory rental practices and ensure that the housing market remains accessible and fair for everyone, especially with the shadow of tax increases looming on the horizon.