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Crisis drives up rents and cuts into apartment sales

The international financial crisis has led to boosting the older Romanian apartment rental market, because owners of such housing prefer to rent than sell on a volatile market.

On the general background on the market, old apartment rents climbed since this year-start by 20-25 percent on average. Andrei Sandu, General manager of Media City, said that the owners are inclined to boost rents mainly for one-room and two-room flats. He also said that the entire market is marked by expectations, reason why the owners instead of selling prefer to rent and the tenants choose to pay rent a few months more in the hope of a downturn in home prices.

According to representatives of the real estate consultancy Colliers International, compared to the three summer months, when sales stood at a very low level, September was marked by a boost in prospective buyers' interest, under the pressure of the new Romania's National Bank (BNR) norms.

Nevertheless, the insecurity in the local and international banking systems and on the capital markets made a lot of prospective buyers to avoid finalizing transactions.

'Rents for old apartments knew a more accentuated advance, of some 30 percent since September due the current conditions on the market. Always rents are higher in moments of crisis', underlined Andrei Pascu, broker/owner of RE/MAX Advantage.

In his opinion, owners of apartments for rent speculated the crisis and pushed up the prices based on the fact that the tenants no longer have the option to take a mortgage loan. Rent hikes are also linked to the start of the academic year in Bucharest (Romania's Capital) and to the lack of available housing units for rent.

But Ion Radu Zilisteanu, CEO of real estate company Intermedias, begs to differ, saying that many owners who planned to sell gave up the idea, instead placing it for rent and that has lead to a rise in the volume of apartments for rent. 'The fact that the number of apartments for rent should trigger lower rents was noticed this year in September, when rents advanced just by 10-15 percent, in contrast to the past years, when it stood at 25 percent', said Zilisteanu.

Despite all these, the rent market in Romania is still reduced, dissimilar to the other countries, the owners living in 92 percent of the housing units in Romania and the number of units for rent being of some 320,000. Currently, the average rent for a one-room flat in a semi-central zone in Bucharest ranges between 300 and 350 euros, a two-room flat between 400-450 euros and a three-room flat - approximately 550 euros.

A share of persons who qualified for home mortgages prior to BNR [National Bank of Romania norms going into effect will now no longer receive the necessary loans, and are obliged to resort to renting for a time. This is also why rents have risen,' according to a declaration for Business Standard by Ioan Bejan, Business Development Manager of Raiffeisen Banca pentru Locuinte.

 

Sursa: http://www.rompress.ro

Tags: owners market apartment crisis rents bnr

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