ECONOMY

Romania’s property boom

An increasing number of international real estate investors are attracted by Romania, the country which along with Bulgaria is going to join the European Union in 2007, or in 2008 at the latest. The property sector is showing dynamic activity in the Balkan country and financial analysts expect demand to peak in the next few years as real estate sales offer small but steady profits. In the last three years these profit margins have made many foreign investors express their interest in buying property in Romania ahead of its EU entry, which is expected to lead to price rises. Guido Maselli, owner of an Italian real estate company active in Romania, believes that the best way for anyone to access the property market in Romania is to buy properties today, as in two or three years their value will have doubled or even trebled. If their location is good, profits could actually be even higher, he emphasized. His company’s experts suggest that conditions are ideal today for properties in Romania, as after EU accession there will be more demand and much higher prices. Most activity in the Romanian real estate market comes from Italians, followed by the French, Germans, Greeks and Arabs. The Italian entrepreneurs are mostly active in the Banat area, in western Romania, which is closer to their country. They began buying land in the region six years ago when Romanian law still prohibited the purchase of property by foreigners. The situation changed, however, when in 2003 the Romanian constitution was modified. With its opening up to foreign investors the real estate market started booming. As soon as Romania joins the EU, foreign investors will be able to obtain title deeds for the properties they already possess. The Italians have already bought thousands of hectares of Romanian land and after accession they are expected to use them for farming or to resell them. Land in the Timis area of the Banat region is 80 percent-owned by Italians, who buy each hectare for 350 to 600 euros and resell it for 1,500 to 2,000 euros. Property prices close to the main cities are much higher due to high demand from citizens who wish to move away from city centers. Many Romanian and foreign investors reap significant profits from buying land in the Bucharest suburbs, where later there is massive construction of houses or industrial complexes as the Romanian capital grows. One of the Romanians to have made big money from buying and selling properties is Gigi Becali, who has bought the country’s most popular soccer club, Steaua Bucharest. Romanian land, experts suggest, will continue for some time to attract numerous foreign investors as it remains largely unused.