Prices On The Real-Estate Market Will Double In A Couple Of Years

The prices of luxury apartments will double in the next couple of years, whilst the moment of European Integration gets closer.
The real-estate market will be divided in two: one of luxury villas and apartments, and one for the average bread-earner.

On both markets prices will go up, but more so in the field of luxury real-estate. "The luxury apartments will go from the current 1,200 to 2,000 euros per square meter to almost double that, that is 4,000 euros," said Ionut Bordei, representative of Eurisko real-estate company.

The prices hike will result from a higher demand and from higher costs of raw materials and work-force. Development of residential parks is high on the outskirts of Bucharest, but not so in the inner city, where bureaucracy keeps the taps closed, said Bordei. Real-estate investors incur extra costs because of the delays resulting from protracted issuing of permits and licenses. Another hurdle for real-estate development is the fact that a mortgage contract may not be bought by another person, said Bordei.

Currently there are 200 demands for luxury apartments in Bucharest, and only 170 on offer for the capital city of Bucharest. "As of now, there are five million potential home buyers but everybody stays on hold because the interest rates for loans are too high," said Ionut Costea, director of Raiffeisen - the Homes’ Bank. He said that by year end the total value of real-estate transactions will go to 7.5 billion dollars.
"According to our estimate, by 2007, this value will rise to 11 billion dollars per year, which means a one billion dollars hike per year," added Costea.

The potential for growth on the real-estate market is so high because some 56% of dwellings are in poor condition, and only 80% of the newly built apartments are up to luxury standards.
A luxury apartment should be located in a top-rated zone, its architecture should render feelings of comfort and warmth, and the block of flats of which is a part of should not look like and office building of like an old building.
The bedrooms in the apartment or in the villa should be large, but not larger than 40 square meters. The day-time area should be separated from the night-time area. The access into the apartment should be made through the day-time area alone. The apartment should also have air conditioning, own central heating unit, cable Internet. The furbishing is less important as this is subject to fashion.
Construction companies receive demands for two to four-room apartments, of 60 to 120 square meters large and costing 70,000 to 150,000 euros.