Land prices around Bucharest to double

Prices of agricultural land around Bucharest are likely to double in 2005 due to increasing demand from real estate investors.

“We estimate that the price of land around the capital city is likely to increase by up to 100%, based on higher demand from investors banking on the possible transfer of this land to the category of land within the city and therefore the increase in value,” said Cezar Lazarescu, general manager of the real estate company Rom International Service (RIS).

While in the west of the country land has been bought by Italian, German and Austrian investors in order to be used subsequently as agricultural land, acquisitions of land near Bucharest have largely been speculative, exclusively for the purpose of selling the land on at higher prices, Lazarescu added. Investors’ preferences, says Lazarescu, were for plots of land situated close to highways or important infrastructure projects.

At present, the price of this kind of land varies between 100 and several hundred euros per hectare, depending on the structure of the property. Most owners are inhabitants that live nearby and sell divided plots, depending on their needs at the time, and who are not very well informed in terms of market prices.

RIS estimates an increase of at least 50% for land inside the city in 2005. Prices of land outside cities in European Union member states start from 1,500-2,000 euros per hectare.

Given that foreign investment in Romania exceeded 3 billion euros last year, the Romanian real estate market looks set to enjoy considerable growth in the years remaining before joining the EU.
alexandru.cerchez@zf.ro