Will apartment prices in Bucharest continue to fall?

The prices of old apartments in Bucharest saw the first declines in the first half of the year, and the trend could continue over the next few months, amid a reluctance manifested by potential buyers, due to the price boom seen over the last few years. "Prices of old apartments rose above the affordability of a regular family, and a whole category of buyers will not to pay such high prices for homes, which will cost less in ten years' time," says Calin Clinciu, development manager of real estate consultancy Euroest. "I think half the supply on the old apartment market was artificial, in that many people who did not intend to go through with the sale, put the homes up for sale at very high prices," according to Ionut Bordei, manager of the residential department of real estate consultancy CB Richard Ellis Eurisko. Clinciu believes the overall growth of the market caught up with these high asking prices after a few months, and this is how prices reached non-realistic levels, according to some consultants. As for new apartments, despite the decline in the number of deals for some projects, prices are not going down, except in the case of overvalued projects.

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Source: http://www.zf.ro/articol_177004/will_apartment_prices_in_bucharest_continue_to_fall_.html

Apartment prices in Aviatiei, Dorobanti and near Vitan Mall, down 20%

Apartment prices in three of the most expensive areas in Bucharest have seen dramatic falls of around 20% over the last month, according to a ZF analysis, based on sales advertised on website anuntul.ro. Whilst in May an 80 square-metre apartment in the Aviatiei district exceeded 200,000 euros, prices dropped to 170,000 euros in June. The ads reviewed, which consider three-room apartments built in the 1980-1990 period, do not provide the price of transactions, but give a general overview of the Bucharest real estate market. A possible explanation would be buyers' preference for new apartments rather than ones located in central areas. 6,000 homes are expected for completion this year, according to a ZF research, after 2,541 homes were delivered onto the market last year, according to the National Statistics Institute. The major price declines in some of the most expensive areas of Bucharest, such as Aviatiei, Dorobanti and near Vitan Mall (photo), come amid a lowering in the average price per square metre, which fell to under 2,000 euros, compared with 2,100 euros a month ago. For a 60 square-metre apartment, this means a saving of around 6,000 euros. Last month's decline, as well as the slower growth seen in the first quarter of the year, comes after a period during which building prices boomed. Apartment prices almost tripled between 2004 and 2007, with the biggest rise of around 65% witnessed in 2005. Therefore, 2008 could be the first year since 2004 when prices could either stagnate or rise by less than 10%.

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Source: http://www.zf.ro/articol_176436/apartment_prices_in_aviatiei__dorobanti_and_near_vitan_mall__down_20__.html

Colliers: Old apartment prices in Bucharest down while new apartments stagnated in May this year

Prices of old apartments in Romania capital Bucharest dropped by an average of 5% in May this year as compared to April as a result of fewer transactions on the market, according to a monthly analysis by real estate consultancy company Colliers Residential Division. The data show a stagnation of prices for new apartments in Bucharest for the same period.

The monthly real estate index BREI launched by the company recently, the only Bucharest district to report an improvement of prices is District 3 - but the boost is limited to 2%.

District 6 has the lowest prices, according to the same report.

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Source: http://english.hotnews.ro/stiri-business-3255707-colliers-old-apartment-prices-bucharest-down-while-new-apartments-stagnated-may-this-year.htm

Romania Invest to continue to buy new apartments

Norwegian-based Romania Invest, which holds around 1,000 new apartments in Bucharest in its portfolio, has acquired 25 homes in the My Dream Residences project in the Pipera district, and intends to start selling the first homes in the Residenz project in the town of Chitila, when the construction is completed. In the My Dream project, the Norwegians mainly bought two and three-room apartments, in a transaction worth 4 to 5 million euros, with the sale of the 35 apartments they hold in Residenz to start in the coming two months. "We will continue to buy because we are certain the market will recover. We don't know exactly when - six months, a year - but the real estate market, like other markets, has a cyclical evolution. Moreover, under the current circumstances, it is easier for us to do good business financially, given that the market has become a buyers' market," Bjorn Hauge, country manager of Romania Invest, told ZF. The Norwegians have purchased homes in the Planorama, Residenz, Ten Blocks, Blue Tower, Vitan Platinum Towers and Armonia Titan projects at discount prices, which they were able to get due to the large number of housing units bought, and to the projects being in an early stage of development.

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Source: http://www.zf.ro/articol_175448/romania_invest_to_continue_to_buy_new_apartments.html

Bucharest Apartment Prices Saw First Decrease In Feb ‘08

Apartment prices in Romania’s capital city Bucharest have increased three times since January 1, 2005, but lowered this year in February, for the first time, according to the real estate index computed by global real estate services company Colliers International.
The company’s general manager, Bogdan Georgescu, told a press conference that February 2008 was the only month to see a decrease in house prices over the past three years.

Thus, the average price of an apartment in Bucharest reached EUR1,826/square meter in January, but lowered to EUR1,776 in February. Prices then climbed to EUR1,887 in March and to EUR1,888 in April.

Colliers officials estimate the prices of newly-built apartments will range between EUR1,150 and EUR2,200/square meter, VAT included, stressing the prices of old apartments might lower by 5 to 15%.

Late May, Colliers International launched a Romanian quarterly real estate index, the first of its kind in Romania, to keep track of the country’s booming real estate prices.


“This is the first real estate index in Romania and will measure the residential market in Bucharest. The Bucharest Real Estate Index, or BREI, will track the evolution of apartment prices in Bucharest,” Colliers said in a statement.

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Source: http://www.mediafax.ro/engleza/bucharest-apartment-prices-saw-first-decrease-in-feb-08.html?6966;2667202

Prices for old flats in Bucharest fall by 10-15%

The prices of old flats in districts like Drumul Taberei and Militari in Bucharest have fallen by 10-15% since the beginning of the year, despite the fact that owners keep asking for the same prices, real estate market brokers say.

The representatives of the magazinuldecase.ro website, which is currently listing almost 3,000 homes, say the decline is the outcome of a shrinking solvent demand for homes in Bucharest, while the supply of both new homes and old homes is rising, considering some of the speculative investors put their flats up for sale at the beginning of this year.

"This used to be a sellers' market until recently, where prices would not be negotiated because no ad would stay up for more than two or three days without the home being sold. As a number of investors feel a degree of panic, we may now be talking about oversupply, considering the decline in the number of solvent buyers and the increase in the supply of homes," stated Matei Malos, the general manager of the company that owns the website. The supply of old flats increased by almost 50% in the first quarter of this year, after the number of homes put up for sale totalled almost 15,000.

However, the average asking price for old flats in Bucharest remains at 134,000 euros, the same as at the beginning of the year.

The price decline mostly affects the districts on the outskirts of the city, whereas prices in the central and prime central locations remain unchanged, given the constant supply.

"Those under pressure to sell generally agree to cut the price by 10 or 15% even in central areas, while those who are in no rush continue to ask for the same price. Last year was a very good year, but early this year we noticed a 20-30% decline in the number of deals," states Daniel Raeceanu, the general manager of real estate agency Rasig Group, which employs 36 real estate brokers.

The prices of old homes in Bucharest went up by almost 50% last year and the depreciation of the RON against the European currency, joined by the increase in interest rates, made it harder for buyers who took out loans to repay their instalments. "While the supply was low and demand was constant, owners drove prices up to a maximum that peaked at the end of last year. Seeing that the interest rate is no longer what it used to be, investors have panicked and lowered prices by 5-10% during the last two months, especially in low-cost districts," adds Claudiu Hategan, branch manager of the Opera Center branch of Coldwell Banker Affiliates of Romania, which brokers deals with homes in sectors 4,5, and 6 of the capital city (Berceni, Drumul Taberei, Militari).

According to the real estate index put together by ZF based on the offers on anuntul.ro website, the average asking price for old three-room flats in Bucharest was 2,070 euros per square metre at the beginning of the year, an increase of 2% compared with the beginning of the year.

As far as new flats are concerned, 6,000 units are expected to be delivered this year, which could be a record on Bucharest's residential market, considering the number of flats completed over the last four years did not exceed 3,000 units a year.

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Source: http://www.zf.ro/articol_173708/prices_for_old_flats_in_bucharest_fall_by_10_15_.html

Colliers to launch a real estate index for Bucharest in May

At the end of May, real estate consultant Colliers International will launch a quarterly real estate index, the first of this kind in Romania achieved by a company of this kind, which will monitor the evolution of housing prices in Bucharest.
"This is the first real estate index in Romania and will be a measuring tool for the evolution of Bucharest's residential market. The Bucharest Real Estate Index (BREI) will monitor the evolution of apartment prices in the Capital and represents a reference point in the professional development of Romania's real estate market", reads a Collier release. BREI will have 2005 as starting date for the analysis and will be published quarterly. The index will be launched at the end of May, together with a virtual real estate exchange through which those interested will be able to get familiarised with investments in these markets.
Colliers will provide more details about the Real Estate Exchange in the forthcoming days.
"If, until now, most opinions on the Romanian real estate market were mainly based on rumour or personal opinions, through this index we want to offer those interested in this dynamic market an objective instrument for the analysis of price evolution and future tendencies", declared in the release Colliers Real Estate Department Manager, Ilinca Păun.
The index was achieved by a team of consultants and analysts of the company and is based on eight secondary indicators that monitor price evolution in the six sectors of Bucharest, both for the older apartments in the blocks built before 1990, and for those in the new residential projects, built in the recent years.
Each sector was divided in districts, and for each district offers and transactions from certain areas were chosen, following a calculation algorithm based on the weight of sales according to quality and price. Also taken into account were the differences between the ways to measure and express areas, but also other factors that influence the apartments' final price per sq.m.
"We have obtained an indicator having at its basis the way to create capital market indicators in Europe, but which also takes into account the volume and the share of sales in certain areas, and the new deliveries of apartments in the market", said Călin Bucur, the coordinator of the group of analysts.

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Source: http://www.curierulnational.ro/In%20brief/2008-05-14/Colliers+to+launch+a+real+estate+index+for+Bucharest+in+May