Romanians and national wealth
Romanians' net wealth is going up in statistics, without their standard of living actually improving
Bogdan Matei, 23.06.2022, 13:50
What specialized studies call the net wealth of Romanians continues to increase at a robust pace, and last year increased by 10% to over 2.6 trillion lei (the equivalent of more than 500 billion euros), according to a report on financial stability, published by the National Bank (NBR). According to the document, the main contribution to this increase came from real estate.
On the one hand, new houses and blocks of flats have been built, and on the other hand, the value of the old ones has somehow increased on its own, on a still dynamic real estate market. In addition, as evidenced by EU statistics, Romania is the member country of the European Union with the most homeowners. In 2020, over 95% of the population lived in a house or apartment they owned, while the EU share was only 70%.
At the other pole, in Germany, the most populous member country and with the most robust economy, about half of the people are renting. Which, analysts note, means that Romanians’ wealth is also a relative concept, as long as it is based mainly on real estate, while salaries and pensions are among the lowest in the Union. Moreover, according to EU statistics, Romania is the country with the most overcrowded housing, of all 27 member states.
Another piece of news is that the times when apartments and houses were sold for very large sums seem to be over. At least that’s what banking experts say. For the summer of this year, about 30% of the banks surveyed by the NBR anticipate a declining trend in credit demand. The Central Bank report also states that the value of deposits exceeding the 100,000-euro guarantee ceiling has increased by 14%, compared to 4% for other depositors.
There is also a significant increase in investment fund holdings and listed shares, which increased by 80% and 2.3% of the Gross Domestic Product, respectively. The NBR considers that, although capping energy prices is a useful measure to protect the income of the population in the short term, the authorities’ efforts should be directed mainly towards the development of new renewable energy sources and the reduction of import dependence.
According to the report, the evolution of average net income was in line with rising consumer prices. Households in the Bucharest-Ilfov region reported money incomes twice as high as those in the northeast region. Also, households in urban areas had average cash incomes 50% higher than those in rural areas. The indebtedness rate of the population increased by 9% in March 2022, compared to March 2021. (MI)
