Recently integrated in EU, Romania Property market offers some fantastic opportunities for well informed investors.
Last year, according to the Royal Institution of Chartered Surveyors, property prices in Romania (predominantly Bucharest) grew by 15 per cent. Some developments values rose by 20 to 35 per cent in 2006, primarily because of a dearth of good accommodation.In the first semester of 2007 alone property prices gained 15%-20%.
This trend is sustained by political stability, strong economic growth together with the country’s accession to the EU in January 2007.
Local demand offers secure exit for investors
More and more romanians have finance to buy the much needed house.There is a great need for houses in Romania property market, with over 1,000,000 units in short on the market. After the fall of communism regime few people were able to invest in properties, but recent economic growth has change that.
Emmerging middle class
Young professionals, independent workers, doctors, lawyers, middle management in multinational companies, small and medium business owners, the new dynamic middle class is stile conscious and fashion driven. They have the finance to buy new, modern properties that are in line with their recently achieved social and economical position. This is the most interesting segment in Romania real estate market, with many investors ready to fulfill the increasing demand.
Mortgage was unknown in Romania until 2003. This is the same year that apartment prices have doubled in months. In addition, interest rates are falling rapidly, from 40% in 2003 to 8-10% in 2007. Mortgage market is still underdeveloped in Romania compared to other European countries.
Romanians are working in EU countries
Few million people are working in Spain, Italy, England and other European countries. They are sending around 7 Billion EURO per year to their families. Most part of the money is invested in real estate properties increasing demand on the property market.
Real estate in Romania offers a vast range of property types that allow every investor to find the right choice
From old villas in fantastic location to new developments in popular neighbourhoods Romanian property landscape offers different options for various investments strategies.
You can buy to restore an old property in one of the best location in Bucharest or other big and medium cities. You can invest in a new luxurious apartment in north of the capital (the master choice of residential location for local elite and expats) or you can invest in one of the numerous Off Plan developments targeting the middle class buyers.
For a better understanding of the Romania real estate market you have to look at the communist build apartment market. This is the most common type of property in Romania, with apartments privately own since the 90’s. Communist apartments are still in high demand because of the lack of alternative.
Romania is a big country with many developed cities.
With over 21 millon people population, Romania is divided in few big, well develop regions with very active property market.
Probably you’ve heard of Bucharest, capital of Romania, but have you ever heard of Brasov? Or Cluj?
Well, those are some of the most developed cities in Romania, with a population that exceeds 300,000 inhabitants and with strong local economy.
In Cluj alone there are over 3,000 company own by foreign investors and Brasov is a tourist destination with fantastic mountain landscape, only 160 km from Bucharest.
Together with Bulgaria Romania has a cost line at the Black See that is a highly demanded tourist destination in the summer.
Iasi, a beautiful city in the east side of the country is going to be a sort of Silicon Valley, with many IT companies already investing or planning to open offices to benefit from highly qualified working force.
For a well informed property investors there are plenty opportunities, with houses to be restored, new apartments and properties suitable for renting, and off plan developments on the market.
Avoid common mistakesProperty investment is a skill like any other.
You can learn it the hard way, through making your own mistakes ... or you can prevent most common mistakes.
Romanian property market has it’s own specifics that you have to learn in order to make low risk investments:
You have to know taxation fees to estimate the full investment price and your possible profit
it’s a good idea to check the estate agents and the developer’s background
You have to consider earthquake problem when investing in real estate
Some lawyers might advice you to form a company in order to make an investment even if it isn’t necessary
You have to be informed about the maintenance costs (especially when you invest Off Plan)
learn to choose the right properties for Romanian market
The best deals aren't always in Bucharest, check the other cities too.
The local buyer is the best exit for your investment so you have to know the type of property they are looking for
Learn about mortgage in Romania for a better understanding of the local Property Market.