Residential Developments were in the last years primarily driven by the rental requirements of expatriate employees of foreign companies, wealthy local entrepreneurs and individuals. Apartments and villas have been mainly positioned in the northern areas (Baneasa, Herastrau, Primaverii, Floreasca, Aviatiei, etc.) of Bucharest and its immediate surroundings.
Since 2004 the Romanian real estate market experiences its strongest boom. Developments have massively spread all over the city, especially in the areas of Militari, Cotroceni, Titan, Vitan, Pantelimon and the outskirts of Bucharest (Pipera, Tunari, Corbeanca, etc.).
Since 2006 projects for the middle class segment have been strongly marketed and experienced a tremendous success. Especially apartment sizes from 45m². (1 room) to 75m². (2 rooms) were sold on the market up to 75% still during constructions.
In 2009, the market has come to a standstill due to the international crisis. Romania has reacted to this problem with the “Prima Casa” project (literally: “First House”), which is a governmental project initiated last year aimed at breathing life into the Romanian residential market. Geared toward first-time home buyers, the program provides loans of up to €60,000 which are guaranteed by the state. This in turn allows banks to lower their interest rates. Of the 20 banks that took part in the program, none charged more than 5.28-percent interest for Prima Casa loans.
Bucharest itself needs at least 80.000 new housing units while the market produces at the moment not more than 10.000 units per year. This guarantees a successful development market for next years. For the forthcoming years the middle class segment will be the dominant market driver in all districts of Bucharest.
The new focus of developments has also reached Romania’s secondary cities with inhabitants over 150.000. Large developments can be seen in almost all bigger cities of the country.
While the development market had been mainly driven in the past by local developers, international developers dominate the market today and will still continue to enter Romania due to its EU accession in 2007.
Due to the emerging competition and increasing residential offers on the market, residential developments will have to be planned and executed according to international and EU standards to meet quality requirements and budgets of Romania’s emerging middle class. The market grows steadily supported by the increasing access to mortgage programs of private banks for companies, individuals and households.
The market is expected to turn within the next 2 years from a developer’s to a buyer’s market. Projects not being able to meet quality standards, right location or infrastructure support, will face sales difficulties respectively will not produce effective sales and therefore suffer from reduced profitability.
Spiegelfeld Romania is specialized in offering Residential Development Properties all over Romania. Our huge database, containing not only property offers in Bucharest, but also in all major cities in Romania, enables national and international real estate investors to reduce risks in order to maximize profits.
Spiegelfeld Romania collaborates with specialized architects, law firms, engineers, construction companies and financial institutions in order to provide real estate investors a profound base to plan and execute their projects.
For the residential field Spiegelfeld Romania offers services like: properties and specialized property search, financial & development management, joint venture agreements with land owners, PPP´s, property appraisals, market research & studies, planning advice, land use studies, apartment sales & marketing.
Please contact us for more information or to receive property offers.
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