Abstract:

The coronavirus outbreak, characterized by an intense evolution at a global level, strengthens the idea that its severe consequences will disturb all social and economic activities for the time to come and will have a detrimental effect on the healthcare system and on the world’s economy. The social distancing measures imposed by authorities worldwide have reconfigured the cost of living and consequently, the value of housing for individuals. “Housing” has always represented a delicate subject due to its functions: it can be a long-term investment; it can represent a store of wealth and can also be used as collateral for lending. Based on the above, residential markets have represented the basis of the world’s worst economic and financial crises, underlining the linkage between the dynamic of real estate prices and the financial and macroeconomic stability of a country (IMF, 2019). This principle is supported by the financial crisis of 2007-2008, caused by the exponential rise in real estate prices due to financial liberalization. In other words, the housing market has become very sensitive to macroeconomic changes and therefore, in the current epidemiological context, the negative effects are expected to be significant. (Allen-Coghlan et a., 2020). Following the crisis, the real estate market in Romania has undergone changes in order to face market destabilization. As mentioned before, the market represents an important risk source for financial and economic stability and is therefore closely monitored by national and European authorities. For instance, since 2016, Romania has undergone a phase of expansion of the housing market activity (National Bank of Romania, 2017) thus, the dynamics of the real estate market, especially the residential sector, must be carefully monitored in the current epidemiological context, to prevent possible negative effects on the national macroeconomic stability.