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Jurnalul.ro Vechiul site Old site English Version Not Enough Land for Investors Appetite

Not Enough Land for Investors Appetite

11 Dec 2004   •   00:00

REAL ESTATE - December 11th 2004
Buying plots of land is to stay one of the most profitable investments, albeit land in the vicinity of urban or development areas.
By DANIELA IVAN

PROFITABLE. Investments in real-estate property may triple their value in the future
The easiest way to bring about a steep increase of one_s real-estate investment is to buy land in the immediate vicinity of cities and then get them re-labeled by authorities as belonging to the city area.

The price of plots of land for urban development went up some 35% in 2004: closer to that figure in big cities and mountain resorts, and lower in poorer areas, like small cities or villages in the plains, according to information delivered by Liviu Ureche, the president of the Romanian Association of Real-Estate Agencies.

There are also plots of land which had their price doubled, in the same period of time. This happened with the plots outside city limits which later were turned by a strike of pen in plots inside city limits. All around Bucharest there are such large plots of land which have been bought by people in the know. _I am referring to plots less than 5 kilometers away from Bucharest city limit. But also a good deal is to be made for plots under 25 kilometers away from Bucharest,_ said Ureche.

I know a good number of real-estate developers who will use this scheme to double the price of their land in 2005,_ adds Ureche.

The center of the capital city does not provide the highly sought for large plots for residential, commercial and office space development that investors are vying for. _This is the reason why we will not live to see large residential districts rising inside the capital city,_ said Ureche. He adds that the good side of that is that residential areas should not be exposed to the noise of a city center. There are only small plots available, suited for rising a villa or a house, but these are not suited for investors seeking a profit because the market is stable in that bracket and not expected to rise.

In 2005 we will experience large investments in hotels and villas on the Olt River Valley,_ Ureche also said. He pointed out that large scale investors seek for purchase plots of land in all the resorts in the area: Olanesti, Govora, Calimanesti-Caciulata, Cozia and Voineasa.

The steepest rise in land prices occurred in Southern and Western Romania. One hectare of land in the Danube plane and Baragan plane, in Southern Romania, costs now up to 500 euros, even when the land is classified as class B, which means of lower agricultural value. In Western Romania, the Italian investors sold to German investors the land here at 1,200 euros per hectare. True, that land was class A, which is best agricultural value.

Analysts of the real-estate market expect the market to freeze at current levels next year. Some buy land only to re-sell it at a profit, but in order to do that one needs to look carefully into the Urban Development Plan and find out how tall the buildings may be erected there. The rule of thumb is to carefully play on that, analysts say.

Translation: ANCA PADURARU

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