Romanian Property News

Statistics on Romanian real estate pricing are rather difficult to gather on the market still dominated by relatively small estate agents, with 1-2 branches at most and only tens of properties in their portfolio. While country-/city-wide statistics might include a level of guesswork and averaging, it is worth focusing on specific areas to see how the prices evolved over the past few years. Picking the area to observe is not easy either, as preferred locations become un-/trendy over night, and prices are heavily influenced by the available type of accommodation, the seller, and even the view, floor, and the parking availability in the area.

The Vitan Mall residential area remained over the years relatively uniform in terms of property availability and desirability. Most apartments in the Vitan Mall area are studio flats, built around 1980s, with standard built area (40-42sqm). This is why a comparison between pricing over the past years in the area is slightly easier to make, based on the property available for sale during all this time. The only filtering that was applied was to exclude the “comfort three” flats. Long story short, comfort three flats provide…no comfort, very little space (typically less than 25sqm), and extremely poor quality build. Should you see any adverts including “cf 3” in the text, you are better off saving a bit more money until you can buy a proper flat.

To narrow down even further, as we all are after smaller investments if possible, the focus of the statistics was: studio flats (cf 1) in the area of Vitan Mall available for sale over the past three years. The data was sampled at 6-months intervals. As a picture is worth a thousand words, you can see the results below.

So, what happened to the prices? Starting from only €20k in May 2004, the price of a studio flat in the Vitan Mall area is now €70k. As sometimes the average figures can be misleading, the standard deviation of the prices was strictly under 5% in all cases, which indicates that the average values pretty much give you the standard price tag of the area. Finally, what concerns us all, is the profit and, why not, the short term profit. The graph below show how much the prices increased on each 6-month interval

Even including the very small increase from November 2005 (which was in fact the month with the fewest properties available), the prices maintained an average increase of 23% for each 6-month interval or, if you prefer, 46% yearly profit. And, just as important, there is no trend to indicate any slowdown in the market, in spite of the continuous warnings from the media about pressure from the newer housing projects.

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