Romanian Property News

According to an article from Cotidianul newspaper, land was the most profitable real estate investment on the Romanian market during 2006, followed by the stock exchange market and the mutual funds. The article above predicts that the same trend will be seen over 2007, i.e. land purchase will top once again earnings on Romanian investments.  Not all kinds of plots will yield the same profit – agricultural land will give returns between 50 and 100%, followed by real estate development plots, which will provide the investors average revenues of 35-50%. 

The second place in terms of profits is likely to be taken in 2007 by investments in Romanian shares (and the associated dividends).  This area is a new alternative, particularly to the Romanian public, with corresponding risks (as everywhere else in the world), but also with substantial returns for both long-term and short-term investments.

A good example of a successful (and impressive) evolution of a stock is Transelectrica. The company was privatised and floated on the Romanian Stock Exchange Market in August 2006, at a value of 22Ron (approximately £5) per share.  In only six months (Feb 2007), the price of Transelectrica shares reached a value of 39.6Ron/share, yielding an 80% return per share. Transelectrica is a very good example, but not the only one. In spite of the attraction posed by the alternative, you should have a good understanding of the Romanian economy and industry before attempting to place your money on the Romanian stock market. Also, you should (and must) take advantage of the (increasing number of) brokerage agencies currently present on the Romanian market.  

Finally, the third place is occupied by the Romanian mutual funds.  The “Active Dinamic” mutual funds offered over 2006 a return of approximately 32%.  From the two types of such funds, the monetary funds are the most stable alternative but they also offer smaller profits. Mutual funds based on Romanian Stock Market shares are riskier, as they depend on the Stock Market variations, but, as expected, the profits are higher.

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