Romania Property Market Seeing Increased Foreign Interest

Romania is seeing more and more interest from overseas property investors, as the property market works towards recovery. Investors seem to have a good deal of confidence that the property market in Romania will be worth the investment over the long haul, as property values are expected to increase over the years. According to Vission House, overseas property investors are “quicker and more determined” to sign sales contracts than residents of Romania.

With the property market beginning to show more signs of life in certain regions of the world, Romania is no exception. Plenty of foreigners who work in Romania, who normally rent homes, are purchasing homes due to the low prices and affordability. They are looking at it as an investment opportunity or perhaps they may end up staying in Romania. Either way, the decision to purchase saves them money when compared to renting.

The northern part of the capital city, Bucharest, is seeing a pick up in the purchase of apartments, as the prices are thought to be at their lowest sales prices. Rental vacancies are quite low so property investors believe investing in apartments is a safe and wise investment.

Just recently, the Bucharest Stock exchange listed one of central and Eastern Europe’s largest property restitution funds and experts hope that this will give an added boost to the property market, as this may draw even more foreign investors to the area.

Within the next two to three years, property experts believe that they will see Romania’s economy and property market strengthen and grow.

European Property Investment on the Increase – Now is the Time to Get Back in the Saddle

Investment in European property jumped 53% in the third quarter of 2009 according to Cushman and Wakefield. Yields are also on the up across Europe. With the exception of the UK, the average yield on European property investments rose 3 basis points on the quarter – the largest quarterly rise since late 2007.

This was part of a report from Cushman and Wakefield on the rising confidence in the European real estate investment sector.

Now is certainly looking like a very good time to get back into overseas property investment in Europe, with a view to completing acquisitions into 2010. Take Germany for example:

Jones Lang la Salle are forecasting that rents on German offices will be 6% lower by the end of this year. Germany is the biggest economy in Europe, largely because of its massive export sector.

A dramatic fall in rental rates on German offices, in line with business expansion beginning to remerge, will likely spark a massive drive on business expansion in German cities; local business expansion, and foreign companies taking advantage of the situation to open offices in Germany.

This will stimulate increased demand in the residential sectors, on property to rent and property to buy. German property has often been overlooked by residential property investors, because other locations offer more spectacular yields, but German property has always been a world beater in terms of the risk/reward ration on buy to let investments,

Now that the foreign investors the world over have learned that solid rental potential that can withstand external pressures is the key to a sound property investment, German property is likely to be high on more people’s short-lists. Such a dramatic fall in office rental rates will push it even higher.

On top of that we have the fact that Germany and Italy accounted for 63% of all retail property investments in the first half of this year. Retail investment is expected to increase in the second half of the year according to analysis by CB RIchard Ellis, and Germany’s retail sector is well placed for some solid growth. This will further fuel demand in the residential sector.

Romania is another market seeing some good expansion in the commercial office sector of late. Analysis by BNP Paribas noted a major increase in sub-leasing from small business expansion. With most of the growth coming from companies involved in business consultancy, IT, private medical public institutions and Utilities, indicating expansion in those sectors within the economy. Therefore demand for residential Romanian property should see some growth in 2010.

Bulgaria sees the opening of the European Trade Centre, a five building office complex and shopping mall in Sofia, now scheduled for Spring 2010. This, again will stimulate increasing demand for Bulgarian property to rent and buy in the residential sector in the area.

Outside of Europe proper, Turkey is doing very well on the back of low interest rates and extended term mortgages. In the two months ending October, the Turkish real estate sector expanded by 2%, compared to a growth of 3% in the previous 9 months. This acceleration is thought to have been because of improving sentiment, and derestricted lending by the banks, including an increase in the term of low-rate loans from 60 months to 10 years.

View Turkey property for sale

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