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Significant house price growth in Romania

2007-04-25
Property prices in Romania increased by an average of 8% to 10% in 2006. In some parts of Bucharest, the increases were much higher, with rates of return on investments among the highest in Europe.

Property prices in Romania increased by an average of 8% to 10% in 2006. In some parts of Bucharest, the increases were much higher, with rates of return on investments among the highest in Europe.

The continued house price increases are attributable to increasing political stability, strong economic growth, increasing demand for housing, and the country’s accession to the European Union in January.

Foreign buying has been enormously important in pushing up house prices, as Romanian property is a significant bargain in trans-European terms, and Romania has become bracketed alongside Bulgaria as the land of opportunity for British and other foreign buyers.

The average selling price for apartments in the centre of Bucharest is around €1,667 to €2,300 per square meter (sq. m.), according to Global Property Guide research conducted in December 2006. Houses with grounds can be had less expensively, for around €1,100 to €1,500 per sq. m. But of course the foreigners are less interested in Bucharest, than in Romania’s beautiful countryside, where prices may be very significantly lower.

In addition, Romanian interest rates are falling rapidly. Lending rates were 45.74% per annum as recently as 2001. Now lending rates are down to 13.4% per annum.

There are no restrictions on foreign nationals acquiring dwellings, but foreign nationals cannot buy land. Despite Romania’s membership of the EU that restriction has not been lifted.