Published on 27 November 2005 at 04:48 pm
Filed under: Europe:- Romania Property Guides » Romania Property Investment Potential
The property investment potential in Romania is quite possibly unrivalled across all of the European emerging markets because property prices in Romania are currently so low and the demand for residential and commercial property in Romania is increasing rapidly.
The majority of best returning investments are currently to be found in the higher end residential property market in the major towns and cities, the winter sports tourism market and in industrial property such as retail and office space.
Because the Romanian property market is still so young and immature however, international real estate investors should not only enter the marketplace with their eyes wide open but they should also employ the services of a good lawyer and potentially a reputable real estate agent as well.
It’s a fact that Western Europeans, Americans and those who come from wealthy market economies are seen by many in Romania as personally very well off and are sometimes targeted by corrupt individuals during the course of property investment transactions - that is why it is imperative to approach this particular emerging property market carefully.
But don’t let this fact put you off because for those looking for true property investment potential Romania offers one of the better emerging economies for the following reasons...it is on target for full EU membership in January 2007 which will allow it to trade more openly and easily with Europe which will boost the Romanian economy. Furthermore the country has a strong GDP; in 2004 Romania attracted EUR 3.5bn FDI compared to the next best country in the region which was Hungary which attracted EUR 2.5bn and in January and February of 2006 FDI reached a record 1,000 million euros which was a 94.2% increase on the same period in 2005; inflation in Romania has been slashed as has taxation and the base starting point for land and property prices is so incredibly low.
In terms of market segment opportunities, Bucharest offers the property investor two angles to target for example. An investor could consider either prime residential property in the best city locations or office space - both market sectors are highly in demand and both have seen the greatest price increases in Romania in recent months. Other areas of the country generally accepted as worth considering by property investors are Ploiesti, Constanta, Cluj, Oradea, Brasov, and Timisoara.
An alternative field a real estate investor in Romania could consider is the tourism market with limited opportunities on the coast and more prolific opportunities in the country’s most popular and stunningly beautiful ski resorts of Poiana Brasov (pictured), Predeal and Sinaia. Here there is an increasing demand for chalets and apartments to let out during the Romania’s long ski season and the shorter summer season and possibly more interestingly for an international property developer there is an intense demand growing among Western Europeans for off plan ski property to purchase in Romania.
It’s important to remember that foreign freehold ownership of land in Romania is not currently permitted according to the country’s constitution - in this way it is a similar country to Bulgaria. In Bulgaria there are currently changes afoot that will see this old fashioned rule become obsolete in the next eight years or so, and a provisional date has been set for an amendment to the Romanian constitution based on when the country gains accession to the EU. Foreign buyers can own property and real estate in Romania but to own land they have to establish a Romanian based ‘foundation’ which is permitted to own land.
Property investment opportunities are diverse in Romania and the potential for capital appreciation is huge. The Romanian property market is a genuine emerging real estate market built on very solid foundations and currently enjoying a growing level of overseas investor interest. For long term gains and some short term yields Romania is a truly interesting prospect.
Europe:- Romania Property Reports
Complete listing of all current property reports for region: Europe:- Romania
