EFG Eurobank Property Services Residential Indices

EFG Eurobank Property Services SA, a member of Eurobank group, is announcing the release of the new Residential Property Index for the Romanian Market, covering the developments of the second quarter of 2012. The tracking of market prices provided by the index offers the Romanian real estate market systematic means of monitoring that help improve its transparency. With the latest figures included, the indices now cover 7 completed historical years. 

According to the latest issue of the EPS residential index, prices rose by 2% nationally in the second quarter of 2012, continuing the rising started in the previous quarter. Average residential prices appear to have recovered some of the losses of the recent years and returned to comparable levels to those of the end of 2006. 

The index of Central Bucharest, despite the fall in the last quarter, records a rise of 5% from the start of 2012. Prices in Bucharest Ring also continued rising, totalling a growth of 4.8% during 2012. Ilfov County presented higher growth during the last two quarters, also correcting higher losses during the previous years. Overall, the Bucharest-Ilfov Region averaged 2% price growth in the last quarter, totalling 6.3% during the first half of 2012. 

In comparison, in the last quarter the Apartment Index in Bucharest grew by 2.3%, at a higher pace than the Capital's average, whereas the Apartment Index in Romania grew at a slower pace than the national average (1.3%). Dwellings of less than three years old appear to have lead the growth in the last quarter, both in Bucharest and nationally. The price of old properties in Bucharest recorded a reduction of -1.2%, whereas at a national level they grew by 1.7%.

These results suggest a potential change in the prevailing trend of the residential market during the last two quarters. Compared to previous quarters, the market moved to newer properties (less than 10 years old), keeping most of the other characteristics at same stable level (small usable size with less than 50 sq.m., average quality and others).

Among the other areas of the country, Dunare & Sea  Division was the fastest growing division in the last quarter totalling more than 6% growth since the beginning of the year. In the last quarter, the price index of Muntenia, Moldova and South Divisions also registered growth. In the remaining divisions, the Centre, North and West indices continued sliding, but at a slower pace, a possible indication of stabilisation.

Referring to the performance of large cities during the last quarter, Timisoara led the growth, mainly correcting a significant negative drop of the previous quarter. Craiova, Constanta, Oradea and Ploiesti also appear to have positive evolutions. In contrast, the Index shows a negative trend for Brasov, Iasi and Cluj Napoca. During the first two quarters of 2012, most of the large cities of Romania recorded positive performances, led by Braila, Ploiesti and followed by Galati, Constanta and Craiova.

Various potential scenarios can be drawn for the future from the recovering pace of Romanian residential prices in the last two quarters. At the optimistic end, the recent positive trend will prevail and keep improving residential price levels in the next quarters. However, an extrapolation needs to take into account the sensitive state of the market and the natural component of statistical noise included in the indices. In any case, the price recovery that took place during the first two quarters of 2012, in most of the parts of Romania, suggests a turning point for the sliding of prices that took place in the recent years and rises expectations for stability and preparation of fertile ground for growth.

EFG Eurobank Property Services S.A. is a subsidiary of Eurobank group. Established in June 2005, as an integrated service centre, the company offers total real estate solutions. EFG Eurobank Property Services S.A. has developed a vast network in the Romanian territory, operating from its Head Office in Bucharest. EFG Eurobank Property Services S.A. has managed to maintain its competitive position among the top real estate companies in Romania, by developing an important portfolio of customers including banks, with Bancpost being the main client, public institutions, real estate funds, foreign investors, local real estate development companies and private companies.