Should You Invest?
As tourism in the country increases and the holiday market
establishes itself, Romania's buy-to-let potential should open up.
Due to the short summer season however, investors must ensure that
their property is in a location lending itself to both summer and
winter months so as to guarantee year round demand and secure
profitable rental returns.
- Property prices throughout Romania have seen 25% annual growth
for the last 2 years.
- Investors who buy property could now be looking at significant
returns in the future as property prices are predicted to
soar.
- Romania offers some of the cheapest real estate in Europe with
the highest predicted growth rates.
- Over the last couple of years Romania has seen an increase in
their tourist market meaning demand for property should
grow
- Easier access from overseas due to improvements in airports and
major roads.
- Strong demand for new-build accommodation, which though under
construction, is currently in short supply.
- A large, skilled and educated workforce that is still one of
the cheapest in Europe and a cut in income tax to 16% has raised
consumer confidence as well as giving the local workforce increased
spending power which should in turn bolster the property
market.
- A good central location ideally placed for trade with other
eastern European nations and with close links to the Russian
market.
- Low rates of personal and corporate tax and favourable taxation
on new-build property
Rental Yields
The main factor driving increases is the expectation of
redevelopment money pouring in from the EU. This has also had an
effect on improving infrastructure, services and employment
opportunities. The demand for property has increased and there is
already discussion of the lack of supply of quality accommodation
to meet local demand. The market is expected to continue to grow
and with property prices increasing, rental yields are also rising
especially in popular cities such as Bucharest, the country's
capital and an upcoming popular tourist destination.
location
type of
property |
size
(m2) |
average
price
to buy
(€) |
cost per
m2 to buy
(€) |
average
price
to rent
(€) |
COST PER
m2 TO RENT
(€) |
yield
(%) |
Bucharest-
Apartments |
|
|
|
|
|
|
| |
75 |
316,425 |
4,219 |
1,319 |
17.6 |
5.00% |
| |
120 |
478,800 |
3,990 |
2,210 |
18.4 |
5.54% |
| |
165 |
730,620 |
4,428 |
3,288 |
19.9 |
5.40% |
| |
250 |
978,250 |
3,913 |
5,098 |
20.4 |
6.25% |
Source:
Global Property Guide
Price History
In 2006 'A Place in the Sun' voted Romania as one of the best
countries to invest in. This gave the property market a boost and
prices have been gradually rising ever since. 2006 saw average
price rises of 8%-10% and now an average price for an apartment in
Bucharest is €1,667-€2,300 per square meter. Since joining the EU
Romania has already seen considerable benefits such as £20 billion
of the EU money being donated to improve roads, hospitals, airports
and schools. This contributes to the rebuild of Romania which will
all in all attract potential investors, increase property prices
and improve the country's economic status.
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