Romanian Property News

According to the press, the boom of the Romanian real estate market is slightly slowing down. The focus is, once again, on the main type of property, the flats, and mostly the Bucharest area. The main reason for these skeptic predictions - the ‘old’ blocks of flats, built during the communist era. Three time periods are currently discussed by the real estate specialists:

• the present. The prices are still increasing. While we’re not witnessing 100% yearly growth, as a few years ago, prices of flats still went up by around 15% during 2007, with certain areas going beyond towards 20%
• 2008. Real estate analysts predict that 2008 will be the turning point for house prices. There are several factors contributing to that conclusion: the current average salaries, the demand for (more) real estate and, most important, the number of ongoing development projects. Nevertheless, a still healthy 10-15% increase will still take the prices of flats further up during the next year. The figure was recently revealed  by the president of the Romanian Association for Real Estate Agents (the Romanian acronym is ARAI), Ruxandra Cleciu, for the online SmartFinancial news website. Note that the interview was though primarily to indicate a small increase in prices of new flats (from 1200 to 1300euro/sqm) during 2008.
• 2009 and beyond. There are quite a few rather gloomy predictions for the “old” flats, indicating that their price will start dropping, under the pressure of “new” flats as soon as 3 years time. In an interview for Bloombiz.ro, Sorin Istrate, the manager of EuroProperty Development, estimates that the price of old apartments will drop by 40% starting in 2010.

The statistics are a must in such a volatile market, such as the Romanian real estate. However, you should take them with a pinch of salt… Back in 2006, Razvan Iorgu from Eurisko predicted that old apartment prices will come to a halt; 18 months later, we hear from the ARAI president (in the above article) that the price of flats increased by 40% over the past two years; let’s not forget though about the EU integration of Romania at the beginning of this year…

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