Bankers want BNR to cover whole guarantee for ''First Home''

The banks asked BNR to accept the whole guarantee issued by the National Credit Guarantee Fund for SMEs in the "First Home" programme in constituting the provisions relating to the granted loans and will agree to an execution period of the Fund of up to 90 days. "We are discussing over extending the value taken into account from the guarantee of the Guarantee Fund for SMEs from the current 50% to 100%, so that the banks will no longer be obliged to make provisions for loans of up to 60,000 euro. If they do not make provisions, they will probably accept a period of execution of 90 days from the occurrence of the delay on the respective loan," said sources participating in discussions, Mediafax informs.

"The banks will execute the guarantee of the National Credit Guarantee Fund for SMEs, in the First Home programme, most likely in the case of arrears exceeding 90 days'', Sorin Mititelu, Executive Manager of the Business & Retail Product Development Department of BCR, said on Friday. In the opinion of the BCR representative, in the "First Home" programme, the customers will decide to what bank they will apply to get a loan and there will be no pre-qualification conditions for the banks from the government. He confirmed the central bank would accept the increase of the value taken into account in constituting provisions, from 50% to 100%, from the guarantee of the National Credit Guarantee Fund for SMEs.

"Studies show that approximately 3% of the active urban population express their intention to buy a home. There certainly is a potential demand, but the eligible demand has decreased even more lately. The programme comes in support of the eligible demand," said Mititelu. He considers the maximum amount guaranteed, of 60,000 euros, covers the need, as long as last year, at national level, an average mortgage loan amounted to approximately 50,000 euros. Only in the area of the Capital the average mortgage loans exceeded 60,000 euros.

The BCR manager also said the bank currently has a maximum indebtness level for mortgage loans of 60% of customer revenues.

The discussions also analysed the possibility of a counter-guarantee from the Finance Ministry, to increase trust in the capacity of the National Credit Guarantee for SMEs (FNGCIMM) to cover the guarantees executed. Given that banks will practically have zero provisions on the "First Home" mortgage loans of up to 60,000 euros, they will not have significant costs for delays in payment and will even be interested in suporting the client in resuming to pay installments in time.

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Source: http://www.curierulnational.ro/In%20brief/2009-06-01/Bankers+want+BNR+to+cover+whole+guarantee+for+''First+Home''

Buyers offer prices even 70% lower than those demanded by real estate market

The prices offered by potential buyers on the real estate market are even 70% lower than those demanded by the owners and, under these circumstances, the offer of apartments put up for rent has increased by 40 since the beginning of the year, EuroMetropola estimates.

"Most of the buyers or those who are shopping the real estate market focused only to opportunities now. Nobody wants to buy at the "price of the area", but only at "crisis prices", which translates into a sharply negotiated price, sometimes almost up to the cost price ", reads a release of real estate company EuroMetropola.

The consultants of the company estimate that whether it is a matter of residential, industrial, land sales or residential, office or commercial space rentals, under the pretext that "there is a crisis", all customers negotiate very tough and make price offers even 70% lower than the initial demand. "As the waiting period from the listing of a property to its sale or rent increased considerably, as compared to 2007-2008, the owners accept negotiation more easily, sometimes up to even half the price asked, forced by other financial obligations. Under these circumstances, no wonder that the number of apartments put up for sale has increased by 40% from the beginning of the year, and the ranks of those who refuse to sell grow more and more," the release mentions.

The consultants of the company say that, in other market conditions, negotiations would go up to 20%, but since there is no market price anymore, buyers try to force the owners' hand even more. "Prices are calming down, but will not decrease very much. Unfortunately, those who want dramatic price drops, driven by personal interests, do not imagine that this could lead to a collapse of the construction and financial markets. Prices should stagnate at a certain level, which would reveal the quality of the building, the year of construction, finishing, location and other advantages", the release mentions. Real estate consultants estimate there are properties in Bucharest that, even before the crisis, would stay 1-2 years on the market without selling, because the price requested was not justified even in a period when nothing seemed hard to sell. It is the case of some land in areas such as Victoria, Floreasca, Dorobanţi, but also of some inter-war villas in Primăverii and Dorobanţi whose owners were refusing any form of negotiation.

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Source: http://www.curierulnational.ro/In%20brief/2009-03-17/Buyers+offer+prices+even+70%25+lower+than+those+demanded+by+real+estate+market

Housing prices could fall by 30% more by end-year

Housing prices in Romania will continue to fall this year, according to real estate company Cushman & Wakefield, which estimates a 30% drop of current levels, while recommending for 2009 investments in properties generating high rents.

According to Cushman, old housing prices fell by 15% in the period September - December 2008, and the new ones by 5-10%, and a 10% decrease in price was registered at overall market level from the beginning of 2009.

"In total, we talk about a fall in prices of up to 35% since September 2008 to date. From September 2008 until now, 50% of apartments have been removed from sale and offered for rental. Under these circumstances, one cannot make a market price for apartments, so there is a possibility for it to fall another 30% over this year. Thus, a 65% decrease may be reached at the end of 2009", the manager of the company's evaluation department, Dan Ionaşcu, said in a release.

Most residential buildings have entered "conservation" and all the unstarted projects, in the project stage, or in the stage of obtaining approvals are offered for sale.

"These projects which were in the stage of planning and organisation and where construction has not started yet represent 70% of all the new projects, on which works started after 2006", the release reads.

On the other hand, the Cushman analysts believe that the small investors, who purchased a large share of the housing under construction in the past two years, will stand the test of the market crisis, because only 15% of those who contracted bank credits will have problems during this period because of the impossibility to reimburse funds.

At the same time, there are very many small investors who have contracted bank credits and therefore will not be so affected by what happens in the market, as they offer apartments for rental at moderate prices.

Similarly, in the residential segment, the most favoured will be the cities where unemployment is very low, respectively those that enjoy the investors' interest, such as Bucharest, Constanţa, Cluj Napoca and Braşov.

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Source: http://www.curierulnational.ro/In%20brief/2009-02-17/Housing+prices+could+fall+by+30%25+more+by+end-year

BNP Paribas: real estate assets in Romania still expensive

Romania does not offer favourable conditions for the investors interested in buying real estate because prices are still high, say BNP Paribas Real Estate representatives, but who, however, see a good opportunity to develop housing priced up to 100,000 euros.

"This year is not a good moment for international investors to buy property in Romania. The market is non-transparent, the investors do not have access to information on the real estate sector, and the difference between the prices requested by the seller and the buyers are willing to pay is still significant", the Deputy Executive Director of BNP Paribas Real Estate, the real estate division of French group BNP Paribas, Henri Faure, told the Mediafax agency.
In his opinion, under these circumstances, the developers that will not adapt to the market by lowering prices will have the most to suffer.

On the other hand, the BNP Paribas Real Estate representative considered that a very good opportunity on the Romanian market this year would be the development of housing priced up to 100,000 euros, to benefit from a payment of 5% VAT.

"The developers must adapt to market needs, to study better its future development. The development of such housing could be a solution to unblock the market," said Faure.
He noted that the most optimistic variant for the real estate market is a change of conditions from the second part of the year, if financing will be unblocked.

BNP Paribas Real Estate is present in Romania through Atisreal company, which acquired the Romanian company Cornerstone International last year. The Bucharest office provides brokerage, consulting and evaluation services on the residential segment, offices and investments.

"This year, we will focus on developing these activities, and, probably, from 2010 we will also bring to the Romanian market other services, namely property management and asset management," Faure mentioned.

The Executive Director of BNP Paribas Real Estate Property Management, Laurie Leclerc, said that, on this segment, the company is interested to buy a Romanian company or to enter into a partnership.

The Group holds three more companies in Romania, respectively Centelem in consumer credit, Cardif - insurance and Arval - leasing.

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Source: http://www.curierulnational.ro/In%20brief/2009-02-06/BNP+Paribas%3A+real+estate+assets+in+Romania+still+expensive

Home buyers offer 30% less than asking price from the outset

In the first week of the year, the few people who have voiced interest in acquiring apartments in Bucharest, have in a first stage offered 30-50% less than prices requested by the owners, given the almost entire lack of real estate transactions due to problems on the lending market, as well as to the rapid depreciation of the RON, according to real estate agents. "There are people interested in homes, but they are still hoping prices will go further down, with some of them additionally being scared by the rise in the euro. We had a three-room apartment in the Aviatiei area, for which the owners were asking 150,000 euros, and a client's first offer was 100,000 euros. Still, I haven't heard of transactions being concluded in the first week of the year," said Elena Usainchisa, broker with Nick Intermed agency, which posted turnover worth 285,000 euros in 2007. "From a buyer's position, under the current market conditions, I offer a 50% lower price for any acquisition. There are many owners faced with a liquidity crisis, who are forced to enter talks. They, in turn, have one price for those who only ask and another for those interested in buying," says Gabriel Dragomir, partner with DPA Estate and former senior broker with Indoors Real Estate.

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Source: http://www.zf.ro/zf-english/home-buyers-offer-30-less-than-asking-price-from-the-outset-3736775/

Colliers cancels contracts for five projects

Colliers International real estate consultancy, the biggest player on the domestic market, has cancelled contracts for the sale of five housing complexes of its portfolio in the last few months, including a total of 5,000 housing units, which were due to be developed over several years.  More specifically, Colliers is no longer a sales agent for FeliCity and Garden of Eden projects developed by GTC, Stejarii developed by Tiriac, Silver Mountain carried out by a firm controlled by businessman Dan Fischer, close to Poiana Brasov, as well as the 900-housing unit portfolio of Canadian Topolinski, put out for sale under Benevo brand.

"(...) Developers pay us on the basis of some success fees, and as sales have been weak lately, we, as well as they, were in a delicate situation," explains Ilinca Paun, head of Colliers' residential department.

Colliers would have generated over 5m euros over several years from the sale of the 5,000 housing units, taking into account an average price of 100,000 euros and a 1% fee for the company. This value is estimative, though.

The company still holds a significant portfolio of housing projects. A lot of developers delayed some projects this autumn amid the low level of sales, a reason why Colliers is also focusing on related services on the housing market, such as project marketing, research or even the improvement of the image of some projects harmed by the crisis.

While the level of sales on the housing market was below the 2007 one, Colliers' housing department has seen revenues rise by 25% so far, inclusively due to a series of contracts signed in 2007 and cashed in this year.

"In 2009 we'll probably see revenues generated by the housing market go down. It will be a difficult year, with part of people no longer able to take out loans, there will be panic related to the general trend of the economy and if the unemployment rate goes up, people will pay more attention to how they spend their money. Still, after European countries come out of recession, the accumulated pressure will lead to market growth," says Paun.

"We have sufficient resources to keep people in the firm for some time, until the housing market rebounds," said Paun.

Colliers in 2007 posted 21.2m-euro revenues and 7.3m-euro income, a level hard to reach this year, says Bogdan Georgescu, managing partner with the firm.

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Source: http://www.zf.ro/zf-english/colliers-cancels-contracts-for-five-projects-3588168/

Prices of old apartments in Bucharest continue to fall

Prices of old flats in Bucharest continued to go down in October, by 6% compared with the previous month and by 16% compared with the beginning of the year, reveals the Bucharest Real Estate Index (BREI), put together by real estate consultancy Colliers International.

The average price of old flats in Bucharest has therefore reached 1,576 euros/square metre, with the most important depreciation occurring in sector six, which comprises districts such as Militari and Crangasi, where prices reached 1,310 euros/square metre, as a result of an almost 13% decline.

On the other hand, according to the ZF real estate index which takes into account the asking prices on the www.anuntul.ro website, three-room flats in Bucharest have dropped by 12% since the beginning of the year, while in some areas the decline was as steep as 20% (Iancului, Mihai Bravu, Oltenitei).

The price of new flats remained at the same level in September and October, according to BREI, although a series of smaller companies announced price cuts or various incentives to help facilitate buying a home.

"Although the asking price remains constant, developers continue with the promotional offers of the summer or launch new ones to boost sales," Colliers officials note. The price drops were caused by the low volume of sales in the last few months, due to both the financial situation that led to higher interests rates and harsher lending terms and to the expectations of the potential buyers that prices would fall, influenced by the situation on the foreign markets.

In addition, a large part of the demand would come from speculative investors until recently, who have, however, reduced their operations significantly.

However, not all the prices of old flats fell, as there are still some owners who keep asking for the same prices, without closing a deal.

"The supply is no longer uniform but divided into two segments; those who keep the prices close to the values of the previous month and those who cut some of the price in the hope they would close a deal. We are therefore seeing a dispute on the market related to the minimal threshold that prices could reach," Colliers officials add.

Although the number of sale-purchase deals went down, real estate consultants have noticed a rise in the number of lease contracts, of some 15% compared with the summer of 2007.

"This autumn, many of the clients looking to buy a home, either no longer had access to loans, or were confused by the situation of the market and decided to rent at least for a while," says Adrian Ghimpau, head of the residential department of the Coldwell Banker Affiliates of Romania.

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Source: http://www.zf.ro/zf-english/prices-of-old-apartments-in-bucharest-continue-to-fall-3447319/