Romanian Property News

Land plots in Bucharest are clearly outside the reach of any small investors, due to their prohibitive prices. At the moment, plots within reach of the centre of Bucharest come with tag prices of at least €1000/sqm (and that’s for the bargains), at least doubling the price of any investment of less than a few million Euros. Although still available, such plots appear only scarcely in the media or any real estate announcements. As expected, considering the values, offers are no longer advertised to the wide population and individual deals are made directly between owners and the interested companies.

For all the rest of us, with less than a few millions available to invest and still wondering where to invest our “too-little-to-get-something-decent-here-but-hopefully-enough-for-something-there” :) the best deals in Romanian estate still revolve around land. Not in the centre of Bucharest, or any of the main cities, but at the outskirts or in the vicinity of any of these cities. Bucharest is already hinting potential investors to look nearby through the continuous promotion of the Bucharest Metropolitan Area, while Cluj, Sibiu, Iasi, and Constanta will follow suit in the near future.

So what is available near Bucharest? Plenty! I’ll focus on three areas to comment on the current prices – Balotesti and Otopeni in the north and Popesti Leordeni in the south-east. Why? Because both Balotesti and Otopeni are sought-after locations, while, in spite of price soaring, the south of Bucharest is still far less attractive than the north.

From the plethora of estate agencies, one of them seems to deal exclusively properties in Balotesti -  (don’t hold your breath, the website is in Romanian). They do have quite a few plots on the website, all sharing though common characteristics: the minimum amount you are likely to pay for a plot is around €50k-100k; prices go slightly down for larger plots and they more than double when the plot includes utilities. Strangely, plots as large as 37 hectares (that is 370,000 sqm) are marketed for similar prices with plots as small as one hectare, which seems to indicate that one of the two prices is slightly off-market.

With Otopeni it was a bit easier, as I got in touch with somebody who actually went through all the stages of buying land there. Is it good? The proud owner of the plot says it is; the approaching utilities indicate the same; finally, the average prices that already got him a 10% in less than a couple of months definitely vouch for it. So…how much was it? Concise: €55k for 600 sqm. The small print – utilities are coming, but they are not there yet; the road is drawn, but not paved; you are essentially buying a bit of field that 10 years (or even 3 years) ago was probably covered with wheat or corn.

With Popesti-Leordeni it was easiest, through the help from a few friends that keep an eye on properties in the area. Being the ugly duckling, you can expect to save a bit on the land and maybe put something aside…either for building a house…or buying some more land. Back to dry figures again? Fair enough: start around €30/sqm for plots smaller than a hectare, and go down slowly when you’re ready to buy beyond 2-3 hectares. Same rules apply – be ready to buy nearly-agricultural land, with no utilities, paved road (or any road altogether), and no nearby constructions.

What are the conclusions? First of all, bear in mind that you can obtain planning permission for all the plots of land mentioned above. As already discussed in earlier posts, within the current Romanian real estate environment, there is no distinction between agricultural land and land with planning permission. Basically, you can build on any land once you go through the procedure of obtaining the planning permission (which is by no means a lengthy or costly process, as in the UK).

Briefly – get ready to fork out €50k-100k for a single-home plot likely to grow in price by around 30% (depending on the area) in one year’s time. Should you have a few hundred thousands euros (or even better, pounds) set aside, you can get a larger sized plot. With this one, you can split it yourself and start selling it with an immediate profit of 10-30%, should you be ready to go through the haggle and annoyances of the Romanian land purchase process and associated paperwork. Finally, if you have beyond a few hundred thousand euros, you should definitely go the final step and start a full-fledged development project.

Why didn’t I mention anything about ready-to-move-in land? Because it’s not worth it! You, as wise investors, know it, I, after browsing the prices, have seen it, and, most important, the owners seem to get to terms with it.

Last posts in Land

• High prices for medium sized land plots in Pipera
• Land for sale in Bucharest? Yes, there’s still some…
• Summer hot prices for land plots around Bucharest
• Price of land in Baneasa - an ever increasing offer throughout the past two years
• Price of land in Otopeni - evolution of sale prices between 2005-2007