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Luxury homes market seeks salvation in rental

About 900 luxury apartments in Bucharest have been waiting for their owners for more than two years, these building developers having hanging around their necks a business worth over 240 million euros.

'Luxury' Bucharesters were the first targeted by investors taking refuge in Romania at the start of the real estate market boom. They constructed hundreds of villas to satisfy a demand that seemed incessant. Developments of this type have been refined in time and the situation continued until 2007. Some have not stopped even now, even if between 800 and 900 luxury apartments are still waiting for pretentious owners.

The need has led many of them to hunt for the 100 moneyed families who come and go from Romania each year and who could become their tenants. In the rental area, things are seasonal. Families appear in the the spring, looking for large apartments close to schools for their children, usually employed in the top management, and in the autumn diplomats appear, set to start their activity next year. For developers, these wealthy 'tourists' represent a gold mine, bringing them over 3.2 million euros annually.

'In a year, more than 100 such families come and go. They have budgets that range between 1,500 and 7,000 euros. About 30 percent is categorized as those on a budget of 1,500 euros and suitable for smaller apartments, 40 percent have budgeted between 1,500 and 2,500 euros, and the remainder 7,000 euros', said Bogdan Voica, managing partner with John Taylor, a company specializing in luxury homes brokerage, quoted by Capital.

Overall, budgets for rent also declined by 20 percent in the last two years.

'The market for luxury apartments was at least as much affected by the financial crisis as the market that addresses the average income. In terms of percentages, the sales were down about as much, some 80 percent, with a much lower volume on the luxury homes market. At present, one or two luxury homes are sold on each project every six months',explained Daniela Marin, consultant with Colliers International.

'Buyers are less attracted to purchase a property for investment purposes, on the backdrop of a rise in the available offers for rent, of the value of rent which also suffered an adjustment, as well as a reduced demand', said Mihaela Pana, residential department director of DTZ Echinnox.

Adama is one of the developers to begin to take seriously into account the rental option, after, in two years time, they only managed to sell 39 apartments within the Evocasa Select. There are already three to four apartments rented by the new owners, with about 550-650 euros / month.

Sursa: http://www.agerpres.ro

Tags: luxury their euros apartments rental homes market

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