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Up to ten pc raise for new flats in early autumn

The new norms of the central bank addressing lending for households do not appear to frighten the real estate developers, on the contrary, during this early autumn, they prepare to raise the prices of new flats. Thus, while during summer, the developers made EUR thousand worth cuts, granting facilities for the purchase of buildings, such as free parking, or furniture within the price, the real estate companies say that they would consider price amendments because of more expensive construction materials and labour force.

"There will be definitely price raises. The raise percentage, which will differ, as until now, has not yet been decided, and it remains to be decided by end of October. But these price raises shall start from around 5 per cent", according to Roxana Repanovici, Deputy General Manager Opus Land Development, cited by The Money Channel.

The price raise percentage for new flats is not a significant one, but developers say that these are justified costs. They say that all costs advance on quarterly basis, regardless the will of the developer.

Yet, the developers say that there is unlikely for potential clients to target old flats since each category of flats is suitable for a certain type of buyers. "We can never make a comparison between a flat from an older construction and an apartment from a residential area, which means more than the plain walls which form the flat", Roxana Repanovici affirmed.

The experts from Esop Consulting add that prices would advance for projects with sale likelihood, whereas in case of those projects where prices are not correlated with the product offer, they will drop.

According to experts, the real estate market is currently experiencing a stagnation time, which should not be regarded as crisis. According to Razvan Gheorghiu - Testa, partner at Tuca Zbarcea & Asociatii, this stagnation is generated by the low number of projects announced in the market.

Romania - lowest level of mortgaging loans in Europe

On the other side, Romania has the lowest level of mortgaging loans in Europe. For instance, in 2006, the housing loans were accounting for 2.6 per cent of GDP, whereas in UK, they were accounting for 83 per cent, and they were over 100 per cent in Denmark. According to Raiffeisen Banca pentru Locuinte, in 2008, our country has reached a mortgage lending level of 3.6 per cent, which is expected to advance by 4 per cent by end of the year, and the average loan for a house is EUR 40,000 - 50,000. "Romania has the lowest volume of mortgaging loans in Europe. Bulgaria, a little over Romania. We are now at 3.6 - 3.7 per cent, and we may reach 4 per cent of Gross Domestic Product by the end of the year. Between 2003 and 2006, the volume of mortgaging loans doubled annually. The average within the EU has reached 50 per cent", according to Ioan Bejan, development manager at Raiffeisen Banca pentru Locuinte.

 

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