80% price hike on residential segment

Prices on the residential segment have increased by up to 80% over the last two years, stated Daniel Fuchs, managing partner of British real estate company Spiegfield. “Prices have increased unrestrained. The upper level of the market has reached 2,000 euros per square metre, which will lead to a stagnation of prices of homes in new complexes,” Fuchs said during a real estate seminar held in Bucharest. He explained 60 to 70% of the new buildings target people with medium to high incomes. “There are hardly any developments for people with medium to low incomes, though a number of projects targeting precisely this market are in development,” Fuchs added. The monthly income needed for someone wanting to take out a loan and to acquire a 50 metre square flat in Bucharest is six time the average salary, compared with the level of 4.8 in 2003, stated Sergiu Oprescu, Alpha Bank’s vice-president. “The average salary has increased since 2003 from 130 euros to 210 euros, while the price of the flats has gone up from 400 euros per square metre to 1,000 euros per square metre,” Oprescu said during the above-mentioned seminar. He added the wider the gap between salaries and the prices of new homes, the lower the number of eligible applicants for real estate or mortgage loans would become, if the National Bank of Romania (NBR) maintained its current consumer lending criteria. Oprescu specified that, judging from the existing data, the volume of mortgage loans granted reached 1.9 billion euros in the first six months, while consumer lending stood at 7.6 billion euros.