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Signs of real estate crisis: fewer transactions, fewer investments

The first signs of crisis on the Romanian real estate have started to emerge: the number of housing transactions dropped and investors are much more restrained in investing money in the domestic real estate market.

Over the past months, fewer housing transactions occurred in the segment of old housing units and new dwellings. Even if analysts say the market will recover, the fact that the trend has been persisting for months proves that either prospective customers do not trust such investments or that prices went up so much that the solvent demand is low. The first signs of weakness emerged on the market of old apartments. Ever since last year the demand has started to decrease. Therefore, according to a survey conducted by Colliers, as many as 17,780 old apartments were sold, whereas last year 16,700 old apartments were sold. The offer has been increasing a lot so that, at present, buyers have much more options to chose from and can negotiate for a better price. Matei Malos, general manager of the web site www.magazinuldecase.ro (housing shop) says that if we calculate the total of old flats put up for sale each year, we find out that their number grew three times in 2008 compared to 2004. This year there are 14,469 housing units put up for sale. He says the solvent demand is about to exhaust and that it is possible the trading price of apartments in old blocks decrease. New apartments are no longer very attractive either. Ilinca Paun, manager of residential department of Colliers International said that the number of transactions in new flats went down 30-50 percent. Over the last quarter of last year as many as 2,600 news flats were sold in Bucharest, whereas in Q1 as many as 2,000 residential units were sold. As many as 500 housing units were sold in April and May, say Colliers representatives. The number of projects released this year is significantly lower as against the number of residential complexes announced last year. For investors, a problem is represented by the prices of land, therefore they postpone investments. Sursa: http://www.rompress.ro

Tags: number housing apartments investments transactions estate fewer signs

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