Romania is still 'the undiscovered Europe' with demand outstripping supply in many property sectors, according to the latest analysis of the country. EU membership, a growing number of tourists and rising numbers of property investors have all helped to make the first half of 2008 a good year for the real estate sector.Also the growth of multinational companies such as GE and Proctor & Gamble has already pushed up the attractiveness of Bucharest in the buy-to-let market.
The commercial sector is booming because of soaring demand for modern office buildings, according to the 2008 real estate market overview report from CB Richard Ellis.'The demand for office space is driven by the auto industry, financial institutions, retailers and IT and telecoms. Vacancy rates in the office sector are below an overall rate of 3% with only 1% for premises considered to be Class A,' the report says.
Analysts believe that the lease market in the residential luxury sector is still emerging. Roughly 95% of all homes built are for sale, according to the report. The most sought after are for rental are three bedroom homes, followed by two bedroom homes. However there is an oversupply of four and five bedroom properties.
A huge number of residential projects are expected to be completed in 2008, according to the report and this will inject a stiff competition in the residential property market, giving buyers an advantage they didn't have in preceding years.Sale prices per square meter are expected to grow by 10 to 30% because of rising costs of construction. But the report warns that the danger for overbuilding exists, and investors would do well to heed the example set by Phoenix and Las Vegas, which saw their property markets crash in the wake of overbuilding.Outside Bucharest the property market is less reliable as an investment prospect. The Black Sea coast suffers from high prices and poor service, limiting the number visitors that choose it as a destination.
According to 2K Properties Ltd, a Romanian property and land investment company, the Transylvanian countryside is an alternative option for people who are looking to buy ramshackle properties for cheap prices and transform them into real estate gems. If the tourism market increases as planned, such properties could be used as holiday rentals and for the growing bed and breakfast market.