When did it start? Who knows? But there is a distinct feeling in the markets that Romania is about to soar. In fact it’s already started.

When Channel 4’s ‘A Place in the Sun’ commissioned Price Waterhouse Coopers to assess the various European property markets, they predicted that Romania would lead the pack over the next ten years with a 414% increase. Sounds massive, but it’s actually 17.8% a year compounded. Guess Einstein was right when he called compound growth the eighth wonder of the world. Seriously … he really did.

Here are some more contributory factors:

• When the Ceausescu regime was toppled, Romanians were gifted their homes. Eighty-nine percent of Romanians own their home without a mortgage. This wealth is highly likely to become deposits on new luxury properties.
  
  
• Large multi-national companies are coming to Bucharest – fast – bringing with them western ex-pats who are used to style and comfort in their homes. Not for them the crumbling grey concrete monstrosities of the communist days.
  
  
• Mortgages are being introduced to Romanians. Whereas UK mortgages amount to almost 50% of GDP, in Romania the figure is less than 4% - so far.
  
  
• The Bucuresti middle class numbers some 100,000 and is growing fast as employment opportunities with the new multi-nationals, and western rates of pay, increase people’s wealth and, more particularly, their aspirations.
  
  
• A report by the Bucharest city planners (National Housing Authority, Romania 2006) states their view that there is a need for 200,000 extra homes specifically for the emerging middle classes. That’s just in Bucharest, where the population is 2.4 million. A ‘massive’ 8,800 new homes were built last year in Bucharest. Guess that still leaves 191,200 to go!
  
  
• Investor mortgages in Euros, at competitive rates, up to 80% of value, meaning that anyone buying now into a development due for completion in a couple of years’ time should find they can almost certainly get the equivalent of 100% finance – refunding their deposit and all closing costs.

I’m no economist, but in my book the combination of massive (and growing) demand coupled with significant shortage of supply topped off with a growing ability to pay = the likelihood of very fast rising prices.

Keep in touch with Sarah and David on 0121 609 7095 – we have a stunning development in Bucharest with prices from just £57,500.

Click here to view the Romania brochure

www.viceroyinvest.com

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