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Price of new housing might suffer corrections in 2008

The price of housing on the Romanian real estate market might be subject to certain corrections this year, in the form of a slight drop in prices against the backdrop of the global financial crisis, which has also had repercussions on the Romanian business environment, according to a statement by Sergiu Oprescu, CEO of Alpha Bank Romania, on Tuesday.

The liquidity crisis and the volatility of the exchange rate in Romania at the beginning of 2008 will also be reflected in mortgages, Oprescu said during a real estate seminar organized by Business Standard in partnership with real estate agency Casa Voastra and sponsored by Schoenherr si Asociatii law firm. According to Ioan Bejan, Development Manager at Raiffeisen Banca pentru Locuinte, solvable demand is 10 percent of total population. Of these, only 0.5-0.8 has problems making their monthly installments. Romania's capital city ranks last in the country as regards the number of new housing in every 1,000 inhabitants. Some 1.2-1.3 houses for every one thousand people are supplied yearly , against the average 1.7 countrywide. Romania currently has 380 homes in every 1,000 people, while the European average is 470. Commercial director of GEA Presa Internacional Antonio Zarnescu says that in 2006 the value of construction works, the black market and private constructions included, get near 12 billion euros. In his opinion, given the forecasted rise in the prices of construction material and works, the investment necessary to cover the current demand reached 70-100 billion euros. Sursa: http://www.rompress.ro

Tags: housing