Real estate market is to follow steady upward trend in the seven-ten years to come, and demand is to continue to exceed supply, under conditions of an insufficient number of apartments and the diminishment of the land market in cities’ central zones, according to real estate market representatives, attending the Real Estate Congress 2008, organized in Bucharest.
"Demand is to steadily exceed supply and that is why the market is to continue to grow in the following seven to ten years”, stated Cristina Ionescu, director with Romania’s Chamber of Commerce and Industry.
Real estate developers foresee a drop in the rising pace of apartment prices in 2008 due to the lack of liquidity on the Romanian market and diversification of the offer, mainly on the segment of apartments destined to middle class clients.
"Market in Romania has not been very much affected by the real estate crisis in the United Stated both from the lack of liquidity and the fact that there is still a very high demand for housing units. Crisis effects in Romania can be seen in the increase of restrictive criteria applied by the banks for crediting and by the passing from a sellers market to a buyers one”, pointed out Ricardo Alcaine Uriarte, managing partner with GIS Real Estate.
According to the real estate market representatives, Bucharest will be confronted in the 15 years to come with an increase in the number of inhabitants, up to double, and with a drop in land prices in the downtown areas, under conditions in which developers will prefer suburban zones instead.
"An integrated real estate and urban planning development for Bucharest, on a 25-year period, and a strategy for the development of urban transport are needed, as an essential factor for the real estate development. For instance, land prices in Bucharest downtown will stagnate and the developers will seek more easily accessible zones in terms of infrastructure, as Bucharest’s south”, said GIS Imobiliare representative.
Director of the Financial stability division with Romania’s National Bank (BNR) Ion Dragulin said that the real estate market in Romania suffers from the lack of real data and that the market is pretty stable.
"For the time being the market is stable, especially because we are still at its inception. Debt defaulting is still below 0.01 percent, which is fine, and for the moment the mortgages are still expanding. The banks continue to offer 95 percent of the mortgage financing to individuals. As for the companies, 48 percent of financing is secured from foreign funds, inducing a certain vulnerability to the moves on the international market”, said Ion Dragulin.
He stressed that Bucharest and Ilfov County lead in the top of mortgage crediting, with more than 12,000 credits at an average value in excess of 70,000 euros. BNR also provisions a growth on the office buildings market and on the industrial buildings segment.