Romania: A Good Choice For Multilingual Call Centers
When people think of reasons to choose offshore outsourcing, reduced price is usually at the top of the list. But for many companies, the biggest driver for choosing an offshore call center location is the increasingly global nature of business. Global businesses require consolidated call center operations -- they save money, deliver tremendous efficiency in transfer of knowledge in complex projects, ease ongoing change management processes, provide consistent service levels, and present better data analytics and integrated reporting. The key, of course, is that consolidated help desks must offer support in multiple languages. When we looked for a location to establish our first offshore location, we considered India, but chose Romania -- a nation that offers both the basic foundation required for any successful call center facility with the added advantage of a multilingual population.Romania offers a talented, well-educated workforce fluent in multiple languages; a superior telecommunications infrastructure; a stable government; standard-hours time-zone coverage for European-based customers; and a significantly lower cost of living. While the costs for delivering support via our new Romania center are competitive with offshore locations such as India and China, Romania offers many additional benefits to our global customers. As the country continues to grow, it is a good choice for call centers that interact with a global clientele.
Education And Language
Romania has a rich and high-quality education system featuring more than 180 universities, including state-owned and newer private universities. The Romanian population has access to state universities free of charge, which insures a highly educated workforce. The private universities emphasize technical skills, and have invested in computer and networking equipment and classes. Both settings offer free Internet access, which is a draw as few citizens have Internet access in their own homes.
In Romania, language instruction is a priority, with a minimum of two foreign languages taught starting in primary school. While the majority of students choose to learn English, French and German also are popular. The practice continues at the universities, where many courses are taught in English, French or German.
The country has multiple communities that speak other languages than Romanian as their primary language. Communities include Hungarian, German, and Moldavian speakers. While some citizens also speak Slavic-based languages such as Czech, Polish, and Russian, the base of Romanian language is Latin, a Romance language close in roots Western languages such as Italian and Spanish.
Even with an accent, Westerners tend to find it easier to understand a Romanian speaking English than an Indian speaking English. Still, we find that the population is extremely well versed in their languages of choice -- we have stringent quality exams for all help-desk agents before they can provide telephone support to global customers, and find a high percentage of our Romanian agents are able to quickly meet our standards. Their variety of languages, dialects, and influences offers a distinct advantage to call centers with global clientele.
Romania has a large, skilled labor force that is eager to expand its employment options. Romanians are interested in jobs that will offer them international exposure and offer them chances to practice their language skills. While call center jobs are viewed as entry-level opportunities, young people are eager to participate in the global workforce and the global economy. A survey recently conducted by the Romanian government found that half of the country's younger workers want to work abroad, and view experience with an international company as a valuable asset in achieving their goal. Many call centers fit that need, and offer both opportunities to practice and use language skills as well as opportunities to relocate to their employer's centers in other countries.
The Infrastructure
Some of the factors we considered when we looked for a location for our green field call center operation were transportation, communications, and utilities. Romania offered clear advantages for us in all of these areas. For example, we discovered that we would have to bus and house workers from outlying areas to a call center in India, but were pleasantly surprised to find that we could build a center in Romania that was close enough to enable workers to use public transportation. The airports, roads, and bridges also were superior, which enables us to easily show the center to prospective customers.
The communications and utility infrastructure also proved superior to India, with Internet access, telephone lines, and electrical systems all fairly modern. The Romanians are eager to attract more business concerns from the West, and recognize that high-speed Internet and other technologies are important. They continue to invest in these areas as part of their program of reaching out to Western businesses.
The Economy And Business Climate
The fall of the oppressive Ceausescu regime brought about many changes for Romania, most notably its interest in reaching out beyond its borders to become part of the global business economy. Today, the Romanian business climate is open to investment from foreign companies. The most successful ventures require a physical presence in the country -- local laws and regulations are constantly being revised, which requires investors to keep up with changes. However, commercial companies can become established in a variety of ways, including as wholly owned foreign enterprises or as joint ventures. Foreign companies can acquire Romanian concessions or leases, as well as purchase land and buildings.
Romania's fast-growing economy offers a variety of incentives to businesses. For example, companies that establish information-technology oriented businesses pay reduced rates for payroll taxes. The country established this incentive in order to keep its trained workforce close to home.
The cost of living is dramatically lower than in most Western countries, which enables companies to establish call centers at approximately the same cost as in India. The business climate is increasingly stable, and the country has joined the European Union in 2007.
As we approach the third anniversary of establishing operations in Romania, it's a good time to reflect on our decision. The benefits of Romania added up to a great solution for our company. We're working with a government that is stable and that welcomes our business investment. We can rely on the telecommunications and transportation infrastructure. We can support United States and European offshore needs from one, blended location. And best of all, we have access to a highly educated and motivated workforce that speaks multiple languages fluently. We believe Romania will open the doors on Eastern Europe for many companies, and are proud to have been one of the first Western help desk facilities to invest in the country, its people, and its future.
vrijdag 18 april 2008
maandag 14 april 2008
ICT outsourcing in Romania
De president van de Camera Imobiliara Belgia Romania stelt Romania voor als de « Silicon Tiger »
Als eerste in de reeks willen we een reportage voorstellen van Nico Schoofs, Vacature, De Financieel Economische Tijd, die bij ons over de vloer kwam om zijn reis voor te bereiden. De reis werd een bijzonder succes....
In het dorp Jucu de Sus hobbelen paard en kar over onverharde wegen.. Tien kilometer verderop investeert gsm-producent Nokia in een fabriek van 60 miljoen euro, op termijn goed voor 3.500 banen. “Misschien vertrekt Nokia binnen tien jaar naar Azerbeidjan. We moeten zien dat we klaar zijn.”
tekst Nico Schoofs
“Willen jullie mijn varkens niet fotograferen? Wij oudjes winnen niet veel bij de komst van Nokia. De fabriek ligt te veraf. De infrastructuur verbetert wel. En mijn buur verhuurt zijn huis aan werknemers van Nokia. Ik kan dat niet, ik heb niet genoeg plek. Ik heb dertig jaar als loodgieter gewerkt, en hou daar nu een pensioen van 600 euro per maand aan over.”
“Dankzij de investering van Nokia kunnen we nu riolering aanleggen in het dorp, en de wegen asfalteren. Er zitten nog steeds tachtig gezinnen zonder gas en stromend water, daar willen we aan verhelpen. We bouwen een cultureel centrum. De school huist nu nog in een verouderd kasteel. We willen een nieuw gebouw. En we werken aan de verlichting van de hoofdweg.”
21 kilometer buiten Cluj-Napoca staat de tijd stil. In Jucu de Sus, een dorp van 4.500 zielen, hobbelen oude Roemenen op paard en kar over onverharde wegen. Een krasse dame leunt op haar bezem. Achter haar wappert een lappendeken aan was. Voornaamste bronnen van inkomsten in Jucu de Sus: de kweek van paprika’s, tomaten en aubergines. Zo’n tachtig gezinnen leven er nog zonder gas en stromend water.
Plaatjes die binnenkort alleen nog in musea te bewonderen zijn? Uitgerekend op een tiental kilometer van deze dorpskern bouwde de Finse gsm-gigant Nokia in geen tijd een nagelnieuwe productiefabriek. Nokia investeert 60 miljoen euro in de fabriek, goed voor zo’n 3.500 banen tegen eind 2009.
De fabriek zal hoofdzakelijk goedkope gsm’s assembleren voor drie snelgroeiende exportmarkten: Oost-Europa, het Midden-Oosten en Afrika. Het sterke aanbod aan ingenieursstudenten van de technische universiteiten in Cluj-Napoca, die maar een kwart kosten van hun West-Europese collega’s, trok Nokia evenzeer aan. Maar ook de nabijheid van Nokia’s Hongaarse vestiging bleek een troef. De Amerikaanse firma Bechtel bouwt intussen een Transsylvanian Motorway, een viervaksbaanproject ter waarde van 3 miljard dollar. Die snelweg zou de reistijd naar Hongarije halveren tegen 2013.
“De grondprijs per vierkante meter steeg al van 5 naar 100 euro.”
De provinciale overheid van Cluj biedt Nokia 94 hectaren aan voor de uitbouw van een ‘Nokia Village’ met toeleveranciers. Dit industriële park, Tetarom III gedoopt (‘Transylvania – Equipment and Advanced Technologies manufactered in Romania’, en het derde in zijn soort) vertegenwoordigt een totale investeringswaarde van 200 miljoen euro.
Drie toeleveranciers van Nokia kondigden al officieel aan zich te zullen vestigen in het Nokia Village. Het Chinese BYD Romania Electronics is goed voor 20 miljoen euro, en 2.000 banen. Hansa Print, de grootste Finse drukkerij, zal er de gsm-handleidingen verzorgen. Stora Enso levert de dozen. De laatste twee bedrijven brengen nog eens 20 miljoen euro en 500 banen.
De bekendste naam in Tetarom I (gestart in 2002, 32 hectaren) is Siemens.
Goed voor 2.500 banen. Tetarom II (12 hectare) heeft als grootste investeerder de Amerikaanse multinational Emerson, dat intussen al een tweede bedrijf neerpoot om elektrische generatoren te bouwen voor windturbines. Redec (het ‘Romania and Emerson Design and Engineering Centre’) stelt meer dan 100 ingenieurs tewerk.
De algemeen directeur van de drie Tetarom-parken, legt ons uit wie de parken bestuurt, en wat de vestigingscriteria zijn. “De provincie Cluj is hoofdaandeelhouder, met als kleinere aandeelhouders de lokale overheden en universiteiten. Vandaag beheren we 150 hectaren. Maar we dromen ervan de hele vallei, zo’n 700 hectare, te ontwikkelen. We hanteren strikte toegangsregels in onze drie parken: geen ondernemingen met lage toegevoegde waarde, zoals bouw- of textielbedrijven, we zetten in op hightech.
More info on www.cibr.be
or mail cibr@telenet.be
Als eerste in de reeks willen we een reportage voorstellen van Nico Schoofs, Vacature, De Financieel Economische Tijd, die bij ons over de vloer kwam om zijn reis voor te bereiden. De reis werd een bijzonder succes....
In het dorp Jucu de Sus hobbelen paard en kar over onverharde wegen.. Tien kilometer verderop investeert gsm-producent Nokia in een fabriek van 60 miljoen euro, op termijn goed voor 3.500 banen. “Misschien vertrekt Nokia binnen tien jaar naar Azerbeidjan. We moeten zien dat we klaar zijn.”
tekst Nico Schoofs
“Willen jullie mijn varkens niet fotograferen? Wij oudjes winnen niet veel bij de komst van Nokia. De fabriek ligt te veraf. De infrastructuur verbetert wel. En mijn buur verhuurt zijn huis aan werknemers van Nokia. Ik kan dat niet, ik heb niet genoeg plek. Ik heb dertig jaar als loodgieter gewerkt, en hou daar nu een pensioen van 600 euro per maand aan over.”
“Dankzij de investering van Nokia kunnen we nu riolering aanleggen in het dorp, en de wegen asfalteren. Er zitten nog steeds tachtig gezinnen zonder gas en stromend water, daar willen we aan verhelpen. We bouwen een cultureel centrum. De school huist nu nog in een verouderd kasteel. We willen een nieuw gebouw. En we werken aan de verlichting van de hoofdweg.”
21 kilometer buiten Cluj-Napoca staat de tijd stil. In Jucu de Sus, een dorp van 4.500 zielen, hobbelen oude Roemenen op paard en kar over onverharde wegen. Een krasse dame leunt op haar bezem. Achter haar wappert een lappendeken aan was. Voornaamste bronnen van inkomsten in Jucu de Sus: de kweek van paprika’s, tomaten en aubergines. Zo’n tachtig gezinnen leven er nog zonder gas en stromend water.
Plaatjes die binnenkort alleen nog in musea te bewonderen zijn? Uitgerekend op een tiental kilometer van deze dorpskern bouwde de Finse gsm-gigant Nokia in geen tijd een nagelnieuwe productiefabriek. Nokia investeert 60 miljoen euro in de fabriek, goed voor zo’n 3.500 banen tegen eind 2009.
De fabriek zal hoofdzakelijk goedkope gsm’s assembleren voor drie snelgroeiende exportmarkten: Oost-Europa, het Midden-Oosten en Afrika. Het sterke aanbod aan ingenieursstudenten van de technische universiteiten in Cluj-Napoca, die maar een kwart kosten van hun West-Europese collega’s, trok Nokia evenzeer aan. Maar ook de nabijheid van Nokia’s Hongaarse vestiging bleek een troef. De Amerikaanse firma Bechtel bouwt intussen een Transsylvanian Motorway, een viervaksbaanproject ter waarde van 3 miljard dollar. Die snelweg zou de reistijd naar Hongarije halveren tegen 2013.
“De grondprijs per vierkante meter steeg al van 5 naar 100 euro.”
De provinciale overheid van Cluj biedt Nokia 94 hectaren aan voor de uitbouw van een ‘Nokia Village’ met toeleveranciers. Dit industriële park, Tetarom III gedoopt (‘Transylvania – Equipment and Advanced Technologies manufactered in Romania’, en het derde in zijn soort) vertegenwoordigt een totale investeringswaarde van 200 miljoen euro.
Drie toeleveranciers van Nokia kondigden al officieel aan zich te zullen vestigen in het Nokia Village. Het Chinese BYD Romania Electronics is goed voor 20 miljoen euro, en 2.000 banen. Hansa Print, de grootste Finse drukkerij, zal er de gsm-handleidingen verzorgen. Stora Enso levert de dozen. De laatste twee bedrijven brengen nog eens 20 miljoen euro en 500 banen.
De bekendste naam in Tetarom I (gestart in 2002, 32 hectaren) is Siemens.
Goed voor 2.500 banen. Tetarom II (12 hectare) heeft als grootste investeerder de Amerikaanse multinational Emerson, dat intussen al een tweede bedrijf neerpoot om elektrische generatoren te bouwen voor windturbines. Redec (het ‘Romania and Emerson Design and Engineering Centre’) stelt meer dan 100 ingenieurs tewerk.
De algemeen directeur van de drie Tetarom-parken, legt ons uit wie de parken bestuurt, en wat de vestigingscriteria zijn. “De provincie Cluj is hoofdaandeelhouder, met als kleinere aandeelhouders de lokale overheden en universiteiten. Vandaag beheren we 150 hectaren. Maar we dromen ervan de hele vallei, zo’n 700 hectare, te ontwikkelen. We hanteren strikte toegangsregels in onze drie parken: geen ondernemingen met lage toegevoegde waarde, zoals bouw- of textielbedrijven, we zetten in op hightech.
More info on www.cibr.be
or mail cibr@telenet.be
maandag 24 maart 2008
Seminar Outsourcing ICT in Romania and subventions for ICT in Romania
Outsourcing ICT and subventions for ICT in Romania The Belgian and European ICT industry is considered as one of the fastest growing industries globally. And in Europe, Eastern European ICT industry has emerged as the fastest growing region because of multiple reasons including better manpower services at relatively low cost and huge potential for the foreign investors to invest in the ICT sector.
Today Romania has become an attractive destination. Romania combines a skilled and affordable workforce in the ICT –sector and 30 billion Euros of non-refundable EU fundings in the period 2007-2013. The ICT sector is also a national priority in Romania. The Nokia plant in the province of Cluj is the leading example (3500 work places after finalization of the project).
The following subjects will be on the agenda:
- Outsourcing of ICT activities in Romania; - Capabilities of ING bank in Romania;
- Structural instruments and Structural Funds for the ICT sector in Romania;
- Identification and formulation of projects;
Program Thursday 19 June at ING Brussels, Avenue Marnix 24, 1000 Brussel:
17u30 : Registration of the participants
17u45 : Welcome and impulse statement, Mr. Mugur Popovici, Commercial & Economic Counselor, Embassy of Romania in Brussels
17u50 : Outsourcing of ICT in Romania – Luc Vangansbeke, Pentamid Group 18u15 : Capabilities of ING in Romania – Nico Himpe, ING bank, Manager European Business Desk 18u35 : Subventions in Romania for the ICT sector - Dipl. ir.Freddy Jacobs, CIBR, Belgian Romanian Real Estate Chamber
19u : Discussion - the participants have the possibility to ask questions to the speakers. 19u15 : Cocktail offered by ING bank
21u : End
Make your reservations direct at cibr@telenet.be
Or take the subscription form in attachment.
The seminar is "free of charge and taxes" for ICT companies (gratis).
All other companies pay 100 Euro ex VAT.
Today Romania has become an attractive destination. Romania combines a skilled and affordable workforce in the ICT –sector and 30 billion Euros of non-refundable EU fundings in the period 2007-2013. The ICT sector is also a national priority in Romania. The Nokia plant in the province of Cluj is the leading example (3500 work places after finalization of the project).
The following subjects will be on the agenda:
- Outsourcing of ICT activities in Romania; - Capabilities of ING bank in Romania;
- Structural instruments and Structural Funds for the ICT sector in Romania;
- Identification and formulation of projects;
Program Thursday 19 June at ING Brussels, Avenue Marnix 24, 1000 Brussel:
17u30 : Registration of the participants
17u45 : Welcome and impulse statement, Mr. Mugur Popovici, Commercial & Economic Counselor, Embassy of Romania in Brussels
17u50 : Outsourcing of ICT in Romania – Luc Vangansbeke, Pentamid Group 18u15 : Capabilities of ING in Romania – Nico Himpe, ING bank, Manager European Business Desk 18u35 : Subventions in Romania for the ICT sector - Dipl. ir.Freddy Jacobs, CIBR, Belgian Romanian Real Estate Chamber
19u : Discussion - the participants have the possibility to ask questions to the speakers. 19u15 : Cocktail offered by ING bank
21u : End
Make your reservations direct at cibr@telenet.be
Or take the subscription form in attachment.
The seminar is "free of charge and taxes" for ICT companies (gratis).
All other companies pay 100 Euro ex VAT.
The Property market in Romania will rise in the next years
The Property Market in Romania will be profitable for years to come !
With price appreciation estimated at 20%-30% per year for the next 5 years, Romania is the HotSpot in European property market.
Recently integrated in EU, Romania Property market offers some fantastic opportunities for well informed investors.
Last year, according to the Royal Institution of Chartered Surveyors, property prices in Romania (predominantly Bucharest) grew by 15 per cent. Some developments values rose by 20 to 35 per cent in 2006, primarily because of a dearth of good accommodation.In the first semester of 2007 alone property prices gained 15%-20%.
This trend is sustained by political stability, strong economic growth together with the country’s accession to the EU in January 2007.
Local demand offers secure exit for investors
More and more romanians have finance to buy the much needed house.There is a great need for houses in Romania property market, with over 1,000,000 units in short on the market. After the fall of communism regime few people were able to invest in properties, but recent economic growth has change that.
Emmerging middle class
Young professionals, independent workers, doctors, lawyers, middle management in multinational companies, small and medium business owners, the new dynamic middle class is stile conscious and fashion driven. They have the finance to buy new, modern properties that are in line with their recently achieved social and economical position. This is the most interesting segment in Romania real estate market, with many investors ready to fulfill the increasing demand.
Mortgage Factor
Mortgage was unknown in Romania until 2003. This is the same year that apartment prices have doubled in months. In addition, interest rates are falling rapidly, from 40% in 2003 to 8-10% in 2007. Mortgage market is still underdeveloped in Romania compared to other European countries.
Romanians are working in EU countries
Few million people are working in Spain, Italy, England and other European countries. They are sending around 7 Billion EURO per year to their families. Most part of the money is invested in real estate properties increasing demand on the property market.
Real estate in Romania offers a vast range of property types that allow every investor to find the right choice
From old villas in fantastic location to new developments in popular neighbourhoods Romanian property landscape offers different options for various investments strategies.
You can buy to restore an old property in one of the best location in Bucharest or other big and medium cities. You can invest in a new luxurious apartment in north of the capital (the master choice of residential location for local elite and expats) or you can invest in one of the numerous Off Plan developments targeting the middle class buyers.
For a better understanding of the Romania real estate market you have to look at the communist build apartment market. This is the most common type of property in Romania, with apartments privately own since the 90’s. Communist apartments are still in high demand because of the lack of alternative.
Romania is a big country with many developed cities.
With over 21 millon people population, Romania is divided in few big, well develop regions with very active property market.
Probably you’ve heard of Bucharest, capital of Romania, but have you ever heard of Brasov? Or Cluj?
Well, those are some of the most developed cities in Romania, with a population that exceeds 300,000 inhabitants and with strong local economy.
In Cluj alone there are over 3,000 company own by foreign investors and Brasov is a tourist destination with fantastic mountain landscape, only 160 km from Bucharest.
Together with Bulgaria Romania has a cost line at the Black See that is a highly demanded tourist destination in the summer.
Iasi, a beautiful city in the east side of the country is going to be a sort of Silicon Valley, with many IT companies already investing or planning to open offices to benefit from highly qualified working force.
For a well informed property investors there are plenty opportunities, with houses to be restored, new apartments and properties suitable for renting, and off plan developments on the market.
Avoid common mistakesProperty investment is a skill like any other.
You can learn it the hard way, through making your own mistakes ... or you can prevent most common mistakes.
Romanian property market has it’s own specifics that you have to learn in order to make low risk investments:
You have to know taxation fees to estimate the full investment price and your possible profit
it’s a good idea to check the estate agents and the developer’s background
You have to consider earthquake problem when investing in real estate
Some lawyers might advice you to form a company in order to make an investment even if it isn’t necessary
You have to be informed about the maintenance costs (especially when you invest Off Plan)
learn to choose the right properties for Romanian market
The best deals aren't always in Bucharest, check the other cities too.
The local buyer is the best exit for your investment so you have to know the type of property they are looking for
Learn about mortgage in Romania for a better understanding of the local Property Market.
With price appreciation estimated at 20%-30% per year for the next 5 years, Romania is the HotSpot in European property market.
Recently integrated in EU, Romania Property market offers some fantastic opportunities for well informed investors.
Last year, according to the Royal Institution of Chartered Surveyors, property prices in Romania (predominantly Bucharest) grew by 15 per cent. Some developments values rose by 20 to 35 per cent in 2006, primarily because of a dearth of good accommodation.In the first semester of 2007 alone property prices gained 15%-20%.
This trend is sustained by political stability, strong economic growth together with the country’s accession to the EU in January 2007.
Local demand offers secure exit for investors
More and more romanians have finance to buy the much needed house.There is a great need for houses in Romania property market, with over 1,000,000 units in short on the market. After the fall of communism regime few people were able to invest in properties, but recent economic growth has change that.
Emmerging middle class
Young professionals, independent workers, doctors, lawyers, middle management in multinational companies, small and medium business owners, the new dynamic middle class is stile conscious and fashion driven. They have the finance to buy new, modern properties that are in line with their recently achieved social and economical position. This is the most interesting segment in Romania real estate market, with many investors ready to fulfill the increasing demand.
Mortgage Factor
Mortgage was unknown in Romania until 2003. This is the same year that apartment prices have doubled in months. In addition, interest rates are falling rapidly, from 40% in 2003 to 8-10% in 2007. Mortgage market is still underdeveloped in Romania compared to other European countries.
Romanians are working in EU countries
Few million people are working in Spain, Italy, England and other European countries. They are sending around 7 Billion EURO per year to their families. Most part of the money is invested in real estate properties increasing demand on the property market.
Real estate in Romania offers a vast range of property types that allow every investor to find the right choice
From old villas in fantastic location to new developments in popular neighbourhoods Romanian property landscape offers different options for various investments strategies.
You can buy to restore an old property in one of the best location in Bucharest or other big and medium cities. You can invest in a new luxurious apartment in north of the capital (the master choice of residential location for local elite and expats) or you can invest in one of the numerous Off Plan developments targeting the middle class buyers.
For a better understanding of the Romania real estate market you have to look at the communist build apartment market. This is the most common type of property in Romania, with apartments privately own since the 90’s. Communist apartments are still in high demand because of the lack of alternative.
Romania is a big country with many developed cities.
With over 21 millon people population, Romania is divided in few big, well develop regions with very active property market.
Probably you’ve heard of Bucharest, capital of Romania, but have you ever heard of Brasov? Or Cluj?
Well, those are some of the most developed cities in Romania, with a population that exceeds 300,000 inhabitants and with strong local economy.
In Cluj alone there are over 3,000 company own by foreign investors and Brasov is a tourist destination with fantastic mountain landscape, only 160 km from Bucharest.
Together with Bulgaria Romania has a cost line at the Black See that is a highly demanded tourist destination in the summer.
Iasi, a beautiful city in the east side of the country is going to be a sort of Silicon Valley, with many IT companies already investing or planning to open offices to benefit from highly qualified working force.
For a well informed property investors there are plenty opportunities, with houses to be restored, new apartments and properties suitable for renting, and off plan developments on the market.
Avoid common mistakesProperty investment is a skill like any other.
You can learn it the hard way, through making your own mistakes ... or you can prevent most common mistakes.
Romanian property market has it’s own specifics that you have to learn in order to make low risk investments:
You have to know taxation fees to estimate the full investment price and your possible profit
it’s a good idea to check the estate agents and the developer’s background
You have to consider earthquake problem when investing in real estate
Some lawyers might advice you to form a company in order to make an investment even if it isn’t necessary
You have to be informed about the maintenance costs (especially when you invest Off Plan)
learn to choose the right properties for Romanian market
The best deals aren't always in Bucharest, check the other cities too.
The local buyer is the best exit for your investment so you have to know the type of property they are looking for
Learn about mortgage in Romania for a better understanding of the local Property Market.
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.
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.
Why is the Romanian Real Estate Market still a good place to invest ?
It may surprise you to read that you can still find good places to invest in real estate properties and still expecting a strong growth for at least 5 to 10 years.
This is the case of emerging markets, and Romania is a very good example.
Why is Romania still a hot spot to invest?
1. Old and outdated house supply. This is the main characteristic of Romania real estate. There was little close to nothing invested in the residential sector in the past decade and a half. 90% of the current properties were built in the former communist regime and are not offering the quality of life the middle class is looking for.
2. Demand for residential properties is coming from the new and dynamic middle class which is profiting from the recent economic revival. They will benefit the most from the EU integration of Romania (first of January 2007).
3. Another thing to consider is that mortgage is still underdeveloped compared to the rest of EU countries or the US.
Interest are pretty high, offering some considerably profit margin for banks, and competition in this sector will only get tougher. More banks from EU countries will try to take advantage from the new EU member country with a 22 mill people population.
Credit conditions are still intended to sustain buyers looking to live in the properties they buy, being quite hard to take credit for pure investment purpose.
The vast majority of potential buyers still don’t qualify for a zero down payment mortgage. They usually have to make a down payment up to 25-30% from the purchase price.
These are the main characteristics of Romania property market that are making it different from other EU countries, including other recent members like Estonia or the Czech Republic.
This is the case of emerging markets, and Romania is a very good example.
Why is Romania still a hot spot to invest?
1. Old and outdated house supply. This is the main characteristic of Romania real estate. There was little close to nothing invested in the residential sector in the past decade and a half. 90% of the current properties were built in the former communist regime and are not offering the quality of life the middle class is looking for.
2. Demand for residential properties is coming from the new and dynamic middle class which is profiting from the recent economic revival. They will benefit the most from the EU integration of Romania (first of January 2007).
3. Another thing to consider is that mortgage is still underdeveloped compared to the rest of EU countries or the US.
Interest are pretty high, offering some considerably profit margin for banks, and competition in this sector will only get tougher. More banks from EU countries will try to take advantage from the new EU member country with a 22 mill people population.
Credit conditions are still intended to sustain buyers looking to live in the properties they buy, being quite hard to take credit for pure investment purpose.
The vast majority of potential buyers still don’t qualify for a zero down payment mortgage. They usually have to make a down payment up to 25-30% from the purchase price.
These are the main characteristics of Romania property market that are making it different from other EU countries, including other recent members like Estonia or the Czech Republic.
Romanian Economy Overheating ?
04:37 - 23 Nov 2007
FT warns about Romanian economy overheating
The Romanian economy has been ringing alarm bells lately - commented British 'Financial Times' daily yesterday. The British analysts start from the concrete example of a successful business in Romania, Raiffeisen Bank, to show that not all news is good news about the Romanian economy. While many investors feel there are profits to be made from banking, real estate and other sectors, the International Monetary Fund sees things differently, and warn about the dangers of economic overheating in Romania.
Juan Fernandez-Ansola, the IMF representative in Bucharest, says: "In this over-optimistic environment we are trying to keep people alert to risks - not an easy task." On the other hand, Stephen van Groningen, Raiffeisen Romania's Dutch chief executive, treads carefully between enthusiasm and caution: "The long-term prospects are good. But in the short term, something has to give in the next year or two to get the economy to a better balance."
But now, according to the IMF, inflation jumped to 6 per cent last month from a low of 4 per cent in July. Rising energy and food prices, compounded by drought, are playing their part. But so is local pay, which is set to rise by about 20 per cent in real terms, with productivity rising at less than 10 per cent annually.
Moreover, whereas in other ex-communist states pay increases are generally driven by private companies, in Romania the public sector is in the lead, thanks to strong trade unions, which have just forced a 28 per cent rise in the minimum wage, FT further notes. Rising pay is helping to fuel a credit boom, particularly in home loans, but creditors might be assuming too much risk.
FT warns about Romanian economy overheating
The Romanian economy has been ringing alarm bells lately - commented British 'Financial Times' daily yesterday. The British analysts start from the concrete example of a successful business in Romania, Raiffeisen Bank, to show that not all news is good news about the Romanian economy. While many investors feel there are profits to be made from banking, real estate and other sectors, the International Monetary Fund sees things differently, and warn about the dangers of economic overheating in Romania.
Juan Fernandez-Ansola, the IMF representative in Bucharest, says: "In this over-optimistic environment we are trying to keep people alert to risks - not an easy task." On the other hand, Stephen van Groningen, Raiffeisen Romania's Dutch chief executive, treads carefully between enthusiasm and caution: "The long-term prospects are good. But in the short term, something has to give in the next year or two to get the economy to a better balance."
But now, according to the IMF, inflation jumped to 6 per cent last month from a low of 4 per cent in July. Rising energy and food prices, compounded by drought, are playing their part. But so is local pay, which is set to rise by about 20 per cent in real terms, with productivity rising at less than 10 per cent annually.
Moreover, whereas in other ex-communist states pay increases are generally driven by private companies, in Romania the public sector is in the lead, thanks to strong trade unions, which have just forced a 28 per cent rise in the minimum wage, FT further notes. Rising pay is helping to fuel a credit boom, particularly in home loans, but creditors might be assuming too much risk.
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