Real Estate in Romania - The last ten years

In the last ten years the Romanian real estate market grew at extraordinary rates in all categories.

Land prices were very low because land was given back to previous owners after 50 years of communism regime and people didn't knew the value of their new, "overnight" properties, plus that the demand was very low, so in the first years (1994-1996) you could buy land for 1-2 USD/ sqm in areas close to Bucharest, that lately became residential areas with prices like 200-300 USD/ sqm.

Apartments were owned by the state and rented to population and after 1990 they were sold to the tenants at low prices (because of the inflation some people paid half of the price from one monthly salary). So most of the people owned their own places. The demand was very low, it took months to sell a 3 rooms apartment in a nice area, at a price like 13.000 USD. Slowly the demand grew, but the incomes were low so the people couldn't raise the whole amount to buy an apartment and often lived with their parents, and even grandparents. Around the year 2000 banks loosened their conditions and people were able to take credit to buy a house so the demand grew instantly (it was cheaper to pay the credit than to pay the rent) and so did the prices. In 2006 the same 13.000 USD 3 rooms apartment cost 70.000 EUR and was sold in a week.

Old houses were valued for their position and land and were used to raise new buildings and followed the general land trend.

New houses were built close to the city, in new residential areas, former agriculture land, they had huge surfaces and huge yards. As land prices begone to rise the yards got smaller, builders raised small residential parks of 5-10 houses and houses were built farther from the city. In this quick development the authorities didn't get involved so the new residential areas were chaotic, with narrow streets, luxury villas close to open land, inhabited finished houses and building sites in the same residential complex for 1-2 years.The price grew slow, doubled in 5 years, in the last year there were cases of builders that made less profit from selling the new house than they could do if they keep the land free and waited for time to pass.

Offices - There were no office buildings in Romania so the market was huge, and it was filled. Major foreign investors oriented to this kind of business, and developed projects in all areas of the city, but mainly in the center and in the north. The rent level was constant in the last years (around 18-20 EUR / sqm) but some developers sold the rented buildings to investment funds for a good profit.

Residential rent - the average rent level for old apartments doubled in the last 5 years but didn't keep up with the selling prices, because in Romania most people prefer to own the house rather than to rent it, even if they have to pay the credit for 30 years. Rent for new apartments is now around 10 EUR/ sqm and is used as an alternative for offices or for residence of foreigners that live in Romania.

Right now the market follows the ascendent trend but more moderate, in waiting for the integration in the EU.

Bird Flu in Romania

In Romania bird flu evolved in two waves, one month one after another.

First wave: Firs cases of bird flu were signaled last autumn in the Danube delta. The virus was suposed to be carried by the migrating birds and infected some of the local domestic birds. The authorities were promt and managed to keep under control the flu, euthanising the chikens and desinfecting the areas.

Second wave: The second wave of bird flu started this spring, one month after they eradicated the first outbreak, not from migrating birds but from a poultry farm in the county of Brasov, in the middle of the country.

Apparently they didn't realise that the birds were sick and sold some of them alive to the small farmers in the surrounding villages. Because of that the virus spread rapidly through the country, today beeng recorded 88 bird flu outbreaks and 23 suspicions. Most of them (29) are in the county of Brasov, but other 13 counties are affected and also the capital city of Bucharest.

The authorities also respoded imediately, as we speak in 79 outbreaks they finished euthanising the birds and started desinfection and in other 7 cases they finished everithing and introduced live chikens to test for the virus. In this operations they euthanised almost 1 million chikens.

This outbreak of bird flu affected the local tourism (mainly in the county of Brasov - beautiful mountain area - and in the Danube delta) and economy. Because of the pannic created by the speed of the plague and the fact that a poultry farm started the whole thing, the population stopped buying chicken meat, causing some of the farms to close production. There was a case of a farm that asked for permission to seal the chickens inside the buildings and let them suffocate to death because they could not afford to feed them anymore.

I've heard on the news that a man died in Indonesia raising the number of victims to 35 in this country. They even suspect that the virus can transmit directly from human to human.

Fortunately there is no case of humans infected with bird flu in Romania.

Tuborg Fest

This week, starting last friday, began the Tuborg Festival (aka Beer Festival) . It will last till next Sunday (4 of Iune) so all of you who are in Bucharest in this time free a evening in your agenda and go drink some beer and have fun.

Every night there is a different concert, starring the most popular bands in Romania. The Fest takes place in front of the Parliament Pallace (one of the largest buildings in the world - surface 350.000 sqm) in Constitutiei Square.

I went to the concert last night and I think that this year is the most succesfull festival since it started. Thre were thousants of people, most of them young, and the athmosphere was excellent, good music, good food, good beer and general fun. The weather was good to us, after a week of impossible heat the wind finally started to blow, bringing confortable warm weather (and some clouds but fortunately no rain). Last year it rained every day of the fest so this year they installed some giant tents, just in case.

Here are some pictures from last night:

The Palace of Parliament - a "must see" in Bucharest

A litle clowdy, but fortunately no rain. Just fun.

I'll go again a few times next week, hope that those of you who are in Bucharest will be there too. Have fun!