New Urban Planning Code in Romania could increase land prices by 20%

Romania's upcoming Urban Planning Code is poised to reshape the real estate market by placing a premium on urbanistic certainty, potentially increasing the value of certain land parcels by as much as 20%. This new framework shifts the focus from speculative future development to the clarity of what can be built, under what conditions, and within predictable timelines.

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From the perspective of an appraiser, the most important change is that we will place an ever-increasing price on certainty, because we will know what can be built, under what conditions, and in how much time.

Andrei Botiș, CEO of NAI Romania, explains that the most significant change for property evaluators will be the increased importance placed on certainty. "We will know what can be built, under what conditions, and in how much time," he stated. Previously, the value of many plots included the hope of future zoning changes (PUZ) that might allow for more extensive development. The new code, however, emphasizes current, approved potential, meaning the market will reward concrete plans more than future promises.

For developers, land with clear urbanistic regulations offers a crucial advantage: better estimation of investments, costs, and future revenues, along with a more predictable project start date. Conversely, land whose development hinges on future urban planning procedures involves tied-up capital, extended timelines, and the risk of not achieving desired outcomes. This difference in certainty can translate to a 10-20% value gap between comparable plots.

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The market will pay more for what is certain and less for promises.

Botiș further elaborated that the owner of land with clear urbanistic status effectively possesses not just the property but also saved time and eliminated risk. If two similar plots allow for identical development, but one enables immediate construction while the other requires a two-to-three-year wait with uncertain results, the market will naturally assign different values. This "certainty premium" reflects the tangible benefits of having a clear development path, making speculative land potentially less attractive compared to plots with defined potential.

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Practically, the owner of a plot with clear urbanism owns not only the land but also saved time and eliminated risk.