Despite forward progress in the Romanian property industry, supply problems still persist in Bucharest, however the gap is closing according to CEE analyst REAS, which examined over 220 residential projects in July to compile its report.
Releasing its findings earlier this month, it found that just over 2,500 apartments and houses were delivered in the Romanian capital in 2007, in contrast to Warsaw, for example, which recorded 15,700 new apartments coming on the market during the same period.
REAS added that a further 6,000 -8,000 apartments should hit the market by 2010 as off-plan projects come to completion but, despite this, demand still outweighs supply as just 48,000 apartments have been
delivered since 1990, averaging 2,600 units per year.
Aside from international interest, REAS said that strong population growth in the capital, which registered 15,000 marriages last year, and a growing mortgage market meant that a severe strain is being placed on its infrastructure to cope with demand.
According to the National Union of Notaries Public in Romania, 249,792 real estate sales transactions were concluded in Q1 2008, up from the 227,235 recorded in Q1 2007, and as many as 520,714 contracts were signed for the whole of 2007 – compared to 486,151 in 2006.
As demand issues continue to dog the Bucharest and greater Romanian sector, several international companies are setting up operations and building new projects in the country to facilitate its growth.
Portuguese developer Plusvag has recently broken ground on its €250m mixed-use development in Ploiesti, Southern Romania. Due for completion by 2012, the 101.63 ha site will contain one of the country’s largest shopping malls, retail space and residential units.
Martinsa Fadesa Romania has also started work on its Bonnire Community City project, which will contain 7,600 residential units distributed across 22 buildings. The first phase of the project includes 1,650 apartments, surrounded by green spaces, children’s playgrounds and commercial premises. Some 449,885 sqm will also be build into offices and contain hotels, education centres and public infrastructure.
Martinsa Fadesa Romania also plans to develop a further 3,400 units across Serbanesti, Stefan Cel Mare, Margineni and Marasesti in the near future.
“Romania is a strategic market due to its economic growth and the increased purchase capacity of its population in the last few years which has driven private investment in real estate and the interest of foreign investors in the country,” explained a spokesperson. “In the context of this economic peak, the real estate market is going under an expansion without precedent and is turning Romania into a European country with more possibility of development and growth.” Source: OPP