Here are 6 facts that show why the Romanian real estate market is perfect for investment:
1. From 2003 to 2007 there has been a constant growth of over 25% per year. Think about this: an apartment in the center of Bucharest in 2003 was worth about 30,000 dollars you will now buy it for over 130,000 dollars.
What caused this massive increase in price? This is when banks started to mortgage loans - people were able to put up as collateral the apartment or house they bought.
This opened up a lot of possibilities, as many buyers are young families with wages above medium but with no other significant possessions.
2. In the first day of 2007 Romania joined the European Union. This is a huge social and economic step for Romania, and will bring much sought after stability.
Although there has been funding from the European Union this will increase as efforts to bring the economy to western standards become more aggressive. This means that wages and general wealth will increase, allowing people to buy more.
3. Wages are increasing more and more: Romania has seen a constant increase in wages and a constant decrease in unemployment. Jobs are being created all the time
People will have more money to spend and like most Romanians they will prefer to actually invest in the comfort of a house rather than renting one or even buying a car.
4. With the integration into the European Union, more and more Romanians will have the opportunity to work abroad. In 2006 there were an estimate 2 million Romanians working abroad bringing 8 billion dollars back in the country.
Families are on a house buying and building trend that will only increase as more money enters the country!
5. In the near future banks are planning to lower the minimum income for a mortgage loan and, better yet, actually remove the need for a down payment which at this moment is between 30 and 40 percent depending on the debt level!
This will of course be a huge spur for buyers with lower income, giving them a fighting chance to buy bigger, better and more expensive houses.
6. There is a very big deficit of houses and apartments: estimates place the need for homes at about 1,600,000 and growing! The government unfortunately can't handle the huge numbers of facilities that must be met, so the people that can afford it actually head towards building houses and villas.
The most luxurious apartments in Bucharest can go up to 500,000 dollars - an amount that will buy a pretty decent lot and actually build a two or even three story house in a residential neighbourhood. The result is almost always better than any apartment can provide.
One normal practice for investors is to buy a few thousand square feet in one of the expanding areas of the main cities, optionally build a house or a villa and resell the property at a later date. A small number of investors that don't want to risk a lowering of prices actually sell right away making a profit of 10, 15 and sometimes even 20 percent.
Believe it or not, Romania's real estate market is ripe for investment opportunities! Act now! Source: romanian-realestate.blogspot.com
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