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Still Not Convinced About Investment Property in Romania
We’re having sleepless nights here at Amberlamb – not a wink of sleep is being found as we toss and turn and ponder the property market in Romania. Now, the situation has arisen many time before when we can see the appeal in a market when all around are ignoring us – but never before have we had such a negative perception of a market and been so seemingly wrong.
The trouble is we’re still not convinced about investment property in Romania – despite some online sources misquoting us and claiming we’re hot on the market, you know who you are guys, shame on you! But we’re apparently the only ones with less than a fair opinion of the potential to be had in Romania.
Why is the Romanian Property Market Expanding?
The rest of the world is worried about the lack of credit available from mortgage lenders, the high levels of debt that many consumers and businesses have found themselves in, the gloomy economic prospects in the likes of the US and the UK and the fact that housing markets everywhere are starting to feel the pinch of all this negative financial energy…so why is the Romanian property market expanding?
Seriously – why?
Significant Investment in Commercial Property Market in Romania
With the news that CB Richard Ellis Group has acquired the largest independent commercial property services company in Romania released this month, the rest of the world cannot remain ignorant about the massive growth occurring in this relatively small corner of the central and eastern European region!
There is significant investment happening in the commercial property market in Romania and the Romanians are targeting this sustained foreign direct investment commitment with a single mindedness that is really enhancing the investment climate. If you were wondering why the Romanian residential sector was less than exciting, it’s because all focus is on commercial property and if you’re looking for a solid long-term bet, maybe a fund in this nation and this particular segment of the property market might be worth closer inspection.
Room for Property Price Growth in Romania
With oversupply in some of the most popular European property hotspots such as Spain and Cyprus, with the US slowdown effect rippling outward and causing concern in many of the major Western property markets and with signs pointing to stagnation in markets closer to home such as across the UK and in Ireland, is there anywhere left to make money from real estate in 2008?
According to Liam Bailey from Knight Frank there is, and as long as you avoid commercial property for the time being, according to us there is too. You just need to head to Constanta in Romania on a Ryanair flight…
UAE Money to Boost Romania Property Market
On the 26th of December an announcement was made that could herald the beginning of a period of significant and positive change in Romania. The Fortune Group from Dubai announced the results of its two year research programme into the viability of investment into the property market in Romania.
The Fortune Group, which has over 7 billion dirhams invested in property based projects in the UAE, conducted extensive investigations into the property market, the economy of Romania and international interest in the nation commercially and from both a tourism and second home standpoint. As a result of their research, the Fortune Group have decided to commit to two multi-billion euro property based projects in Romania, and this UAE sourced money will no doubt boost Romania’s property market significantly.
Reasons to Rethink Romania for Property Investment
There would appear to be a distinct division of opinion with regards to property investment in Eastern Europe at the moment with the bulls and the bears going head to head and challenging opinions about the potential for sustainable growth in the markets of Latvia, Estonia, Bulgaria and Romania for example. Whilst it is pretty obvious for anyone to see that Latvia’s bubble is about to burst, the picture is less clear when you focus on Romania.
Romania’s star has not shone as brightly as others in this region and so some believe that there is ongoing potential to profit from various investment strategies in Romania’s property markets – others are choosing to bank on IMF’s Albert Jaeger’s findings – he believes that with Romania’s economy having expanded by 5.6% in Q2 2007, there are signs that it could now overheat. Personally we think there are reasons to rethink Romania for property investment.
Property Market Prospects in Romania in 2007
As is widely known, Romania joins the European Union on the 1st of January 2007…some have said that this entry date is too soon and that Romania still has a long way to go to improve fiscal policy, to root out corruption, reduce poverty and improve in terms of overall competitiveness. However, the European Commission has already set some of the highest entry standards ever for Romania and the nation has met its obligations for entry.
In terms of the property market prospects in Romania in 2007 they are relatively restricted in terms of the profitability investment in property in Romania will return in the short term…but 2007 will be an excellent entry period for investors looking for long term gains and yields in both the residential and retail sectors.
Confidence in the Romanian Property Sector
In January 2006 a respected UK based property investment publication suggested that should Romania achieve EU entry it could return investors in excess of 400% gains in 10 years. Then, just when the announcement came in September that Romania had been given the green light for EU entry an anti-corruption website named Romania the most corrupt EU entrant and subsequently we at Amberlamb have spent much of 2006 witnessing sharp divisions in investor sentiment in relation to Romanian investment property and whether or not it represents a viable and good short, medium or long term bet.
While faith and confidence in Romanian real estate as an investment commodity are most certainly not a given among individual investors - and where they exist they are easily shaken - it’s definitely fair to say that there’s a great deal of confidence in the Romanian property sector from leading corporate investors and international businesses suggesting that corruption is not a restrictive issue for them and that the long term prospects for substantial growth and significant profits more than make up for any negatives that might exist making the path towards property profits less than perfectly smooth. Here’s some of their insight into Romanian property to help our readers make up their own minds about Romania from an informed position.
Romania’s Property Market Hot for 2007
The level of interest in property in Romania as an investment commodity was already intense prior to the confirmation that the nation will join the EU in January next year – Knight Frank reported earlier this year that Romania was likely to become a property investment hotspot for 2007 for example – but now that the confirmation has come through, the levels of interest in this emerging property market have soared and Romania’s property market is definitely hot for 2007.
Romania Property
For international property investors interested in learning about which sectors of Romania’s property market currently offer strengthening yields, increasing underlying prices and the best potential for sustained medium term growth, this is a review of Romania property – both commercial and residential.
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