Property mania in romania

Real estate prices in Romania are expected to fall by up to 60 per cent in 2009 as property investors fail to find finance...

According to analysts all sectors in the country's property markets are likely to suffer and sellers who manage to find buyers are likely to make no profit and even a loss.

Market conditions are likely to follow a similar pattern to 2008 and even luxury properties which have held their value could see prices drop by between 10 and 30 per cent.

'The sellers are on the market but more and more of them are squeezed by loans, while buyers don't tend to offer as much money as before,' said Ionut Ciocan, Senior Consultant at real estate firm DTZ Echinoz.

He predicted price falls of up to 60 per cent in some areas. A property that until now sold at 4,000 euro/square metre will now go for 3,000 euro/square, he added.

Even prices in Bucharest, which has been very popular with real estate investors, are expected to fall. However, Romanian property consultancy EuroMetropola expect that there will be opportunities in the south of the city.

Valeria Coroianu, Co-ordinator of EuroMetropola's Residential Department, said urban development projects like shopping centres and plans for an airport will sustain interest.

But recovery is dependant on the global economic outlook and at present the residential market is not controlled by buyers or sellers but by the banks that are severely restricting lending.

She added that speculative transactions are now almost all a thing of the past and land prices had started to come down from a high in July 2008, falling 35 to 45 per cent in the last quarter of 2008 in some areas.

The commercial sector is unlikely to be any better. Last month Austrian investment fund Immoeast, one of the largest investors on the Romanian real estate market, postponed or cancelled 54 projects in Romania, with a total market value of £2.17 billion.

Source: www.propertywire.com