maandag 24 maart 2008

Why the real Estate Prices will rise for the next 5-10 years in Romania ?

Mortgage factor. Mortgage was not used until 2002. The same year the prices started to go up from $6000-7000 for a one bedroom apartment in Bucharest to €70,000-90,000 for the same property in 2007.Mortgage is still pretty expensive and qualifying conditions still have room for relaxation. Actual regulations are set to change in close future in order to guarantee credit access to a bigger part of the population.

Booming Economy. Romania is one of the fastest growing economies in Europe, only after Estonia and Latvia. A 7.4% grow is for 2007 after a strong 7.8% in 2006.

Falling Inflation. With forecast inflation of 4.1% for 2008, Romanian proved it’s ability to keep inflation under control. This will lead to increased confidence in the property buying market with further more investments.

Increasing employment. Today unemployment rate is one of the lowest in Europe, with a fantastic 3% in Bucharest. In fact many sectors are in lack of workers, construction included.

Work migration. Few million people are working in EU countries especially after the EU integration. Over €6 billion are sent every year from the workers to their relatives in the country. Most part of this money is invested in real estate properties.The lack of workers in many sectors, including in real estate, will push up salaries and will increase property prices.

Increasing salary will permit more access to mortgage resulting in greater demand and higher prices.Increasing foreign investments. With €9.1 billion FDI (Foreign Direct Investment) in 2006, Romania has some impressive opportunities for investors.Romania was the leading country in the region for FDI per capita.

Growing tourist industry. There is a 7.4% annual growth in this sector for the next ten years according to World Travel and Touring Council.EU Funding.

Romania will receive €32 billion funds for the years 2007-2013, to improve local infrastructure such as roads, schools, hospitals and agriculture. This will lead to more jobs therefore more people who can afford to buy or rent properties.

Geen opmerkingen: