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.

On the economic side of things there’s indicators that things are going very well for Romania.  Eurostat’s figures show that growth in the nation is outpacing the EU norm – mind you, that wouldn’t be hard – and that GDP has expanded by over 8% in Romania already this year.  But then, what about inflation?  That’s hitting everything from the cost of living to the cost of construction and it is a negative for the property market.

On the retail side of things there are massive name players entering the market or expanding their base in Romania – and we can understand that, to a point.  This is a country where there was a serious lack of mainstream retail product – from clothes by Mango, (who are opening an outlet as well as five new shops across Romania), to groceries by Spar which is investing 18 million euros into new supermarkets in Romania apparently.  But the personal income levels and amounts of disposable income floating about in Romania are not developing as rapidly as one would expect given the amount of mixed use commercial property product coming to the market surely?

And then there’s the property market to be considered on a standalone basis.  You have everyone from Hungarian property developers to Deutsche Bank buying up blocks of apartments and mixed-use developments across the nation.  But you also have large commitment being withdrawn at the last minute from major businesses which were seeking large scale factory and production bases in Romania.  Take Actavis, the Icelandic pharmaceutical company, one month there were reports saying they were investing 50 million into property in Romania, the next month they have changed their plans and headed to Italy.  Why?  Because according to one market commentator: “Romania is deficient in terms of national programmes supporting greenfield investments and the state doesn’t seem to intend to change this situation very soon.”

Aye, and there’s the rub…no matter what you say and what you think about Romania, the state does not seem to be very welcoming of overseas investment on any scale.  As a foreign property investor you really do have to take a very, very long-term view of the market before you can see any worthwhile advantage in our opinion.

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.