Approximately 60% of these loans are secured by real estate assets, the rest being direct exposure. In 2024, direct exposure increased by 10% and indirect exposure by 6%. With only 21% exposure to the construction and real estate sector, Romania has one of the lowest levels in Europe, compared to the Czech Republic (35%), Poland (24%) or Sweden (62%).
Vlad Saftoiu, Head of Research at Cushman & Wakefield Echinox, emphasizes that this low exposure offers a balance between prudence and opportunity, leaving room for investment without overburdening the banking system. The steady growth in lending reflects confidence in the potential of the commercial real estate market.
Although the quality of the CRE loan portfolio is weaker than the overall one, significant improvements have been recorded: the non-performing loan ratio for construction and real estate decreased to 4.3% in September 2024, and that of loans secured by real estate assets (excluding companies in the sector) decreased to 4.9%.
86% of CRE loans have a debt service coverage ratio above 2, indicating a solid repayment capacity on the part of the borrowers.
The construction and real estate sector plays a key role in financial stability, representing 15.3% of GDP in Q2 2024 (compared to 13.8% in Q2 2022), above the EU average (14.9%) and other countries in the region (e.g. Bulgaria – 10.8%).
These companies represent 15% of all non-financial companies in Romania, employ 12% of the workforce and own 20% of the assets of this sector. Although the debt ratio is higher (181.7% in 2023 compared to the average of 158.2%), the trend is downward compared to 2022 (210.6%).
