While overseas property investors have been considering former Eastern Bloc countries, Romania is often forgotten. However, now may be the time to wake up to the potential Romania has to offer.
2016 saw the fastest growth rate of selling prices for the Romanian real estate market for nearly seven years, with the residential property market recorded growth of 11 per cent, according to data compiled by property portal Active Property Services.
Developers became far more active last year, delivering 52,206 new residential units across the country, confirmed by official building permit statistics. 98 per cent of these were privately funded, showing a renewed confidence on the Romanian property market.
This increase in development is to satisfy increasing domestic demand for property caused by improved salaries and low interest rates, as well as a surge in demand from overseas property investors seeing the investment potential in Romania.
Managing Director of real estate agents Colliers International, Ilinca Paun, commented: ‘If I want to develop residential, it is a safe bet. The good news is that banks are financing such developments with good terms, so I might have quite a high return on my investment.’
Over half of new developments during 2016 were in urban areas such as Brasov, Sibiu, Iasi, Cluj-Napoca and Timisora. All cities where a young middle-class population involved in predominantly IT and engineering is demanding better housing to purchase or rent.
There are still bargains to be had in Romania. For example, a south-facing plot of land in Bihor, just a couple of kilometres outside the city of Oradea can be purchased for around 100,000 euros.
Covering over 12,000 square metres and currently used as an orchard, the plot is almost guaranteed planning permission for either residential or commercial development due to its close proximity to the city.
Commercial developments such as guest houses and hotels are actively encouraged by local authorities to encourage tourism to the area.
Many such land sales also include an existing dwelling that can be renovated or extended, and can often also include outbuildings.
If refurbishment or development is not for you, then there are many modern villas available.
In Constanta, on the Black Sea coast, a little over 300,000 euros could purchase you a four-bedroom villa, with living and dining room, kitchen and pantry, even boasting a wine cellar.
Most modern villas typically come situated on a plot measuring up to 3,000 square feet, giving plenty of outside space.
With property development booming, financed by private investment, Romania may be the place for overseas property investors to seriously look at for capital gains over the years to come.