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The real estate market is expected to start growing again in Romania
The consultancy and audit firm PricewaterhouseCoopers Romania this year expects a significant amount of real estate investments in our country. Also, it expects the building work to be resumed at a fast pace, mainly in Bucharest, Timisoara and Cluj-Napoca, following the investors' increasing appetite for the real estate sector in 2014. According to a PricewaterhouseCoopers press release, company representative Francesca Postolache said: "In 2014 in Romania as well, we noticed an increasing appetite of investors for the real estate sector, with a significant amount of transactions being concluded throughout the year for office properties as well as for the commercial sector. We expect 2015 to bring a significant amount of investments in this sector as well. "
In 2014, the real estate transactions sector saw an increase of 1.2 billion Euro, as compared to 300 million Euro in 2013. According to DTZ Echinox, 45% of the total amount is made up of retail project acquisitions, 30% is made up of offices, the industrial sector attracted 15% of the total amount of transactions, while the land purchase accounted for 10% of the total amount of deals. According to PricewaterhouseCoopers estimates, the investment market will further make headway in the next few years. The president of Romania's Real Estate Brokers' Association Dragos Vlasceanu:
"In 2014, our total amount of real estate transactions saw its all-time high. Last year, we had almost 850 thousand transactions as compared to 2007, which was the peak year, the real estate boom year, when we had 700 thousand transactions. In terms of dynamics, we have a 20% increase as compared to our best year so far, I mean 2007. "
The market has seen a slight price rise of late. Dragos Vlasceanu again:
"We don't have such a parameter by means of which we can say the price is going down. Quite the contrary, the demand is continually growing, as most of the people withdraw their cash from the banks and buy property, as at the moment this is the most profitable investment. So the economic and financial situation on the market actually encourages the real estate property investment. The government has been encouraging the purchase of homes with its First Home program. This year has seen the highest allocation of funds as demand increases. "
Dragos Vlasceanu also gave us details on the construction of holiday houses:
"We have not recovered so much as to think of buying a holiday house, or rather, the number of people who can afford something like that is still small. So, the market is still at a deadlock. However, rentals are doing really fine. As a rule, rentals in the outskirts are on the wane as the distance to the area is likely to affect the budget. Generally speaking, rentals are sought-after in the crowded urban areas with a very good public transport infrastructure, and by that I mean tube stations in particular. As for sales, things are working really fine. Why? The price per square meter has gone down to around 700 Euro, plus or minus, of course. According to the surface area, anyone can manage a budget of around 700-800 Euro per square meter in the outskirts. "
According to the real estate website imobiliare.ro, at national level, the average price per square meter for apartments put up for sale in the month of May stood at 928 Euro, that is 0.8% more than in the similar month last year. In Romania's Capital City Bucharest, the price for apartments got cheaper on the average, for a similar period, by 2.3%, that is up to 1,056 Euro per square meter. In Brasov, the average price saw a 6.1% growth in May, that is up to 855 Euro per square meter. In Cluj-Napoca, flat owners' average price per square meter increased from 863 to 1,011 Euro. In Constanta, the Imobiliare.ro index per square meter reached the 900 Euro threshold, that is by 4.2% more than in May 2014. And in Timisoara, flat dealers' price per square meter currently stands at 875 Euro, that is by 8.2 % more than in 2014.
Mediafax News Agency has recently reported that Joseph Houlihan, CEO of European Property Federation, an organization based in Brussels which brings together real estate players with an overall portfolio amounting to 1,500 billion Euro, said that Romania's real estate market was on a growing trend, arresting the developers' and investors' interest, thanks to its good returns on investments. "Romania's real estate market at the moment offers the best returns on investments in Central and Eastern Europe, still standing at 8%, while A class properties in Warsaw and Prague offer a 6.5% return on investments, or even less", Joseph Houlihan said. In Bucharest, several office buildings are under construction, with roughly 120 thousand square meters scheduled to be delivered this year, and another 500 thousand square meters next year, according to data carried by Ziarul Financiar daily paper.
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