Housing prices are thought only for profit

Publish date: 16-07-2009
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In a free market lacking transactions and full of uncertainties we are witnessing a moderation in housing prices in Romania. At this moment, all the players in the market are interested to know how much they will fall, so that the values attained would be normal and not exorbitant ones, as they were a year ago, but at the same time to be available for trading. From the perspective of some analysts, the normal values a sqm price should reach is somewhere around 600-700 euros/sqm, but current housing prices are based on profit and not on the purchasing power of Romanians.

"To make a fair evaluation one should take into account extremely many factors which can not be motivated in a few words. I consider that 600-700 euro / sq m is an approachable price. At present, however, the prices are not made for the purchasing power of Romanians by category, but are related only to profit," Mihai Stan, CEO of the real estate portal TopEstate.ro, told the Curierul Naţional.

Housing values like 4 years ago

With regard to housing values, Mihai Stan told us that the phenomenon called global crisis "has brought prices to what they were in 2005-2006, prices for old dwellings have decreased by up to 40%, in some cases even up to 50%, generally for those built before 1980. " As for the new housing, overall prices have not fallen by more than 10%. "The relative rigidity of prices for the new housing is due primarily to the high cost of building materials in the period 2006 - 2008, when these works were made, and not ultimately because of the high cost of land. In Constanţa, on the whole, housing prices decreased by 20% to 40%, in Alba county by 30%, and in Arad much less, by 5 - 10%," he added. Matei Maloş, General Manager, MagazinulDeCase.ro, also opinates the values of old housing have been considerably adjusted. Thus, they "have reached half the value attained at the peak of the real estate bubble, in some cases they have dropped even more than that."

Curierul National

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