International financial crisis stabilizes Romanian real estate market, according to experts

In the context of the current international crisis the speculative temptations from the Romanian real estate market have been driven away and prices stabilized compared to last year, representatives of the real estate agencies told daily Bursa.
The crisis led to the normalization of the market because investors can no longer hope to round up revenues staking on profit much above the value of the investment made, as it happened last year, said Calin Clinciu, development manager at real estate agency EuroEst.
He said the financing for developers has become heavier, the real estate market is sensible at present, that’s why only a few people have the courage to launch new projects in a moment in which the banks take protection measures.
The official of EuroEst does not see the situation as a moment of crisis for the Romanian real estate market, but only a stabilization of prices. Apartments will continue to sell, however at a lower pace compared to last year, he said.
Naturally, a real estate market comes to a standstill when developers construct too much. „This happened in Spain. It was natural the market came to a standstill, because more dwelling units than in France, Britain and Germany altogether were built,” said Clinciu.
In Romania, the prices of apartments went down because the competition emerged in the same areas where several projects are concentrated.
At the same time, there is a restraint as regards the acquisition of apartments with a view to reselling them afterwards at a better price. This is a first effect of the crisis, the lack of confidence.
Houses might be bought by those who really need housing, less by intermediaries who stake on their trading at a higher price.
„If last year we recommended owners to sell, today they want this, but we are no longer able of selling them,” said Clinciu.
The new crediting requirements imposed by the National Bank of Romania could not stop Romanians to buy homes, but will prompt them to direct towards apartments with a smaller number of rooms, in the limit of the obtained loan. „The prices of the new apartments will not go down, only the prices of old apartments will,” said the representative of EuroEast.
According to Alexandru Nitescu, manager within the real estate agency Regatta, the norms of the National Bank of Romania, which harden the conditions of extension of loans will lead in the short run to a slowdown in the crediting, however the market will self-adjust.
„The number of mortgage loans will return to a reasonable level, if not even higher than at present and we estimate this will happen within 4-6 months since the introduction of the new norms for the BNR (National Bank of Romania), said the expert of Regatta.

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