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.

One of the best ways for an investor to achieve the most from Romania is by targeting the fledgling travel and tourism industry.  At the moment the industry is emerging and restricted by many issues from accessibility to poor infrastructure in terms of hotel accommodation and poor service in terms of the attitudes of local Romanians to tourism in general.  Over the medium term we are absolutely certain that the travel and tourism industry in Romania will grow and improve significantly.  To date it has fallen away from governmental attention as the nation has been striving to meet its obligations for EU entry, but after January the 1st 2007 the travel and tourism industry will likely come under closer scrutiny in Romania.

Supporting our view are the following facts...the government of Romania already understands the importance of the role tourism plays in terms of its country’s social and economic development, after all with little effort applied travel and tourism already accounts for 4.8% of overall GDP growth and employs 5.8% of the nation’s workforce.  As a result of this fact, in percentage terms the government has committed to investing back into travel and tourism almost as much as they receive in terms of GDP growth from 2007 onwards.

For Romania to achieve its true travel and tourism potential though it has to initially raise awareness of the cultural, historical and environmental delights it has in abundance, the government and private sector have to create a workable tourism plan and implement it for development and growth and they have to make it worthwhile for commercial investment to come into the industry.  We are confident that this will happen and believe that investors who take the time to identify potentially emerging hotspots and focus careful residential real estate investment in these locations in 2007 will do very well over the medium term.  Look to the coast for example which is stunning and under explored or explore ski and hiking locations…

Looking to the longer term, city based investment into apartment property units for rental and long term capital appreciation makes sense.  Property prices have already been increasing in the likes of Bucharest where employment prospects are more positive, and with EU entry it’s likely that greater investment will come into the major towns and cities in Romania and with investment comes inward migration and also increasing affluence and demand for real estate.  This will have the effect of pushing yield potential and also property prices.  Another consideration is investing in logistics and warehousing in some of the border towns or examining the retail sector which many experts predict has incredible room for growth in Romania.

All in all 2007 will be a good year for very well researched market entry, but investors should not expect massive returns in the short term from property in Romania – rather it is likely to be a solid, long term investment choice.

Special Reports: Property News for Romania

Romania Property Buying Process
After Romania joins the EU in 2007 its property buying process will become simplified

Romania Property Investment Potential
Romania has an exciting emerging property market sector that’s attracting growing levels of overseas investor interest and generating impressive growth

Romania Property Investor’s Introductory Guide
The real estate market in Romania is in its infancy but offers property investors stunning property at incredibly affordable prices.