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Real estate developers in Romania face hardship in obtaining finance, businessmen sayUpdated: 23-09-2008 |
Romania's constructions sector currently faces a rise in prices for raw materials and difficulties in getting finance from banks, according to Florin Pogonaru, president of the Businessmen Association in Romania (AOAR).
Some real estate developers report delays in selling the lodgings and are obliged to get refinance from banks. Also, the lenders generally select projects according to location.
Real estate accounts for 8.2 percent in banks' financing. Realtors saw higher fixed assets, from 4 percent in 2004, to 15 percent in 2007.
On the other hand, real estate companies are financed mostly from abroad and the long-term and short-term external debts weigh more than the internal credit in overall loans.
Offers in constructions are still very high in Romania, despite investors' low trust.
Constructions rose 33.3 percent in the first half of the year versus the same period in 2007, and reached 8.1 percent in the country's gross domestic product (GDP), statistics showed.
Services and constructions are two non-competitive sectors which account for more than half of the country's GDP. Romania has to keep an annual economic rise of 4 percent above the European Union (EU) mean to be competitive.
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