Most small real estate brokers could go bankrupt

Publish date: 05-01-2009
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Up to 80 percent of the 10,000 real estate agencies active before the financial crisis could go out of business in 2009, as they do not have the financial resources needed to survive, considering that real estate deals are virtually non-existent.

Coldwell Banker Affiliates of Romania is countering this phenomenon by launching a franchise system, which means on the one hand that it will expand countrywide, and on the other that it will act as a lifeline for small agencies that will have the advantage of operating under a known brand, in order to over-come the crisis.

"Of the 10,000 Real estate agencies active before the crisis, 80 percent are small, with one or two employees. These are most exposed to the crisis, and will suspend their activities. There will be no bankruptcies, rather just a freezing of their activity while they wait for better times," said Ion Radu Zilisteanu, Manager of the Intermedias group and spokesman of the Romanian Association of Real Estate Agencies (ARAI). According to Zilisteanu, only some 8,000 agencies are still operational, and the number continues to drop.

The volume of housing units for sale in November 2008 not only interrupted the upward trend in sales of the previous month, but lead to a sharp 42 percent decline for studio apartments, a 35 percent drop for one and two-bedroom apartments, and a 21 percent fall in offers of three-bedroom apartments, according to the monthly report of the portal.

Business Standard

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