Romanian Property News

Although normal practice in the UK, buying off-plan property is far from traditional for Romanian investors. Used to pay up-front for finished properties, Romanians are still rather reluctant to invest in flats and houses that they can see only in computer generated images and architectural plans.

This reluctance is wearing off though, little by little. From newspaper articles to TV stations, the media is enthusiastically promoting the benefits of off-plan investment in early stages of a development project. According to average figures, the typical gain for off-plan property is situated in the region of 30-40%, figure that includes both the market increase (10-20%) as well as the raise of the intrinsic value of the property (10-20%). Leaving aside their fears, we’re likely to see in the near future people moving their savings from banks into development projects.

Going over to Maths101 and making a quick calculation, we can see the benefits. With an average duration of projects of 2-3 years, an investor is likely to get an equivalent 10-13% yearly profit from the invested sum when the building is put on the market. Is this a safe, guaranteed investment? Hard to say, as we’ve witnessed some sour experiences from Dubai investors with blocks of flats that…never materialised. Still, so far, maybe because it’s early days and there is more than enough profit to be made from actually delivering the properties :), there is no report of a bankrupt development project or company. Further, with a construction volume that covers than half than the current market demand, we’re also not likely to see the prices going down in the near future.

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