Romanian property owners breathe sigh of relief as economy gets on track to recovery

News Posted On: 17 February 2010

Source: http://www.property-abroad.com

Romanian property owners and sellers have had quite a few reasons to breathe a sigh of relief in recent weeks. Romania, like many of its neighbours took a real beating from the worst of the financial crisis, and its government had to go some to keep the country from collapsing in on itself, which now leaves it with a substantial budget deficit and in substantial debt -- not a lot of countries aren't.

Of course this has all been known for several months and none of it would make anyone breathe a sigh of anything but exasperation, so what are you going on about writer?

Well, firstly they have gotten the International Monetary Fund back on board in a standby arrangement that will not only provide over 1 billion euros in loans and grants, but will allow them to tap financial markets around the world to raise a further 1 billion euros or more.

Secondly, the IMF agreement followed the adoption of the 2010 budget which laid out how Romania was going to pay for its spending during the crisis. This obviously met with IMF approval. It also followed a significant cooling of political tensions, which may or may not have been as a result of the new budget.

Either way, all the positive news has led to global financial ratings agency Fitch upgrading Romania's sovereign ratings from negative to stable. The body also affirmed Romania's foreign currency long-term debt rating at BB+.

Romania is part of a Bloc within Europe known for its exception growth potential, and solid investment opportunities. If it can get its economy really back on track Romania can get back to what it should be doing.

New Romanian Government hopes to put the country back on track

News Posted On: 03 December 2009

As if the fact that the economic crisis has just about collapsed the Romanian economy weren't bad enough, the government collapsed last month, just weeks before the election that will take place on Sunday.

The first job for the new government (whoever it may be) will be to restore relations with the International Monetary Fund so that they may restart the payments of Romania's 20 million Euro aid package.

After the election the new government will have 3 election free years. Analysts hope that they will use this time wisely, to make the substantial reforms necessary to bring Romania's level of Foreign Direct Investment up to a par with the other former Balkan states and the rest of Europe.

Since the USSR was disbanded and states like Romania, Bulgaria, Serbia and the others became independent states, most of the former Soviet States have made massive reforms to reduce corruption and increase the faith of international investors, but Romania has struggled with these reforms thus far.

Romania has been among the worst affected in the world by the economic crisis, and if it weren't for the IMF coming to the rescue the economy may well have collapsed altogether.

It is hoped that the new government can act quickly to restart IMF payments and get the economy back on track. If the government can use the 3 election-free years to make the reforms necessary, then there is no reason not to forecast strong growth in the Romanian economy in the mid-long term -- following the former Yugoslav pattern.

If you believe in Romania's future you can look upon the current crisis as a golden opportunity. Romanian property can currently be bought at incredibly low prices, and will grow immensely in value over the long term, once Romania gets back on track.

IMF approves further 2750 million dollars for romania

News Posted On: 25 September 2009

The International Monetary Fund has approved a further 2.75 billion Dollars in standby funding for Romania, bringing the total awarded the Eastern European state to 18 billion since the onset of the crisis. The extra funding reflects the worsening of Romania's recession since the initial 15.25 billion was awarded.

"Against the backdrop of a significant deterioration in economic activity since the approval of the stand-by arrangement in May, policy implementation has been strong," he said.

"The deeper than expected economic downturn, however, requires a recalibration of policies so as to strike an appropriate balance between the short-term response to the crisis and the medium-term policy objectives."

Lipsky said a revised program for the country would focus on "permanent reductions in current spending, while preserving capital and social security net spending."

But he warned that the reductions would require "additional reforms" in the areas that represent the largest fiscal risk, including "expenditure commitments, pension reform, contingent liabilities and public entities outside the central government."

The additional funding comes a couple of weeks after Eurostat; the European Union's statistical office revealed that Romania's economy had contracted by 1.2% in the second quarter, when many European countries emerged from recession. This however was a major slowdown in the contraction, which had been accelerating previously, hitting -4.6% in the first quarter. The IMF assistance could well have played a part in this.

The IMF assistance is a good thing for Romania, according to Les Calvert, director of overseas property portal Property Abroad.com.

"Romania has not endured the recession as well as other comparable countries like Albania and Slovakia have. This indicates that the government's policies for managing the economy and dealing with the crisis may not have been as competent. The IMF's guidelines and stipulations on the financing could prove to be good for Romania, not only in the short-term but the long-term also," he said.

Romania property growing in popularity

News Posted On: 24 April 2009

Property Abroad has announced that enquiries into Romania properties increased by 10% in January 2009. These figures are based on the total number of enquiries for Romanian properties in January 2009 being higher than they were in January 2008, which subsequently means Property Abroad had more enquiries into properties in Romania than it has had any other month since it first began advertising property in Romania.

Les Calvert director of the company put the findings down to recent research reports predicting stability in Romania's future in the face of global adversity, he said:

"Not to be big headed but one of our recent research reports found that several countries in Eastern Europe were to fare better this year than most western European economies with far bigger economies. That report recommended property investment in Slovakia in 2009, but it mentioned that Romania was to fare almost as well -- of course property in Romania is much less expensive than it is in Slovakia; and perhaps this has played a part in the increase in popularity of Romania property."

Property Abroad have some excellent properties in Romania, some rightly attracting the attention of serious pure investors. Definitely classifying as worthy of investment are the 1 bedroom off-plan apartments in Constinesti, Romania's up-coming Black sea resort with a guaranteed 6.7% rental yield and being sold from just over £28k. If these properties are to be as profitable as similar properties on Bulgaria's Black sea resorts then the time to invest is now before prices rise, because when they start growth will be rapid.

Another off-plan Romanian property with plenty of growth potential is the apartment development in Bucharest offering 2 bedroom apartments from just over £55k. The Italian style Cittadella development consists of 110 modern apartments and houses and is located in western Bucharest. In emerging markets like Romania, the capital often grows before and in many cases more rapidly than the coastal areas. This is why the starting price is higher but there is still plenty of room for growth.

Remarkable Romanian economy tipped for property investment

News Posted On: 17 April 2009

Though the EC recently adjusted its growth forecasts for Romania, its economy is still expected to grow this year. That makes Romania one of the few countries in the world that is expected to avoid recession, quite an exceptional achievement for a country with a fragile emerging economy -- though it is surprisingly common in Eastern Europe.

"Romania's economy is exceptional. Though several Eastern European emerging markets are expected to escape recession, but only four by such a large margin: Romania is expected to grow by 1.8% this year, exceptional given that the big European economies have fallen into recession like dominoes," said Les Calvert, director of overseas property portal Property Abroad.com.

The continued economic growth within Romania also means a healthy outlook for the property market. Overseas investors should always be looking at who they are going to resell the property to, without relying on fellow foreign buyers. This usually means a healthy internal economy and a rising demand for housing among the locals.

"Many of the properties we have are in areas that are growing into economic hubs within their region. The properties -- like many in Eastern Europe -- are cheap, and with rising demand for housing in the area, will be easily resold," Les continued.

Property Abroad.com Ltd, a long standing UK based overseas property portal is currently advertising hundreds of properties for sale in Romania, including a beautiful 2 bedroom house in Central Transylvania for £39,000, and a massive land bank in Odorheiu for commercial investors priced at £656,361.

Property in Romania - an overview

News Posted On: 23 March 2009

After years of political and economic disruption that this country has witnessed, Romania is on the brink of something very big as far as real estate investment in the country is concerned.

The country was under the grip of repressive dictatorial regime until 1990 when Ceaucescu was overthrown, and it is only in the last decade-and-a-half that Romania has realised its economic and political potential in the real sense.

Resultantly, the opportunities for commercial, business, industrial, and residential property investment are literally served on the platter for visionary real estate investors.

Contrary to the popular belief, foreign residents can also own property in Romania, if they know their exact legal position.

Why Property Investment in Romania is not a bad proposition?

Up until recently, no one wanted to invest hard-earned cash in to any kind of property in Romania and the reasons were not far to seek. A politically volatile country with its economy in shambles, Romania looked every bit a ‘destination to avoid’ for the real estate investors.

One of the poorest nations of Europe, Romania looked a pale shadow of its former self that had rich cultural and traditional heritage. And an indifferent dictatorial communist regime up until the 1990s did little to promote the cause of the country and the countrymen.

However, things have improved remarkably over the past few years. Romania is one of the newest members of the European Union (EU), which, in itself, marks, the beginning of a long transformation process for the country. The country has to eliminate legal and administrative hassles for investment purposes.

This means that Romania has to forego many of its prohibitive stipulations, like the bar on foreign investors to purchase property in the country as an individual. However, there will be no bar if a foreigner forms a Limited Liability Company and invests in Romanian real estate.

Romania has had some interesting historical significance in Europe. It is the largest Balkan State and is popularly known as an Island of Latinos in a sea of Slavs. Romania was ruled by Romans, Ottomans, and Austro-Hungarians at different points in history. Resultantly, there is a treasure-trove of cultural and historical remnants spread all across the country, which is a natural tourist attraction.

The Saxon town of Transylvania is popular for the Bran Castle of Dracula fame. The painted monasteries of Bucovina and the rural village idyll of Muramures are everyones delight. Paris of Balkans, the capital city of Bucharest, is by no means a dull city. It is as vibrant as any other European capital. However, the pride of place in Romania is 2007 European Capital of Culture is the old city of Sibiu in Transylvania.

If the Black Sea Coast offers a unique coastal lifestyle and aquatic adventures, it is the densely forested Carpathian Mountains in the plains that boast of the largest wetland in Europe, the Danube Delta. The country has everything a tourist looks for in a holiday destination. The only thing that is missing seems to be political will to transform the country swiftly.

Romanian Property

Due to sustained efforts of the government, there are newer avenues available for property investment in Romania. And thanks to the country's EU membership, things can only change for the better in the country.

Undoubtedly, major investor interest revolves around the capital city of Bucharest. Offering easy accessibility to commercial and business centers, Bucharest is also the center of all political activities in the country. You can own off-plan apartments here for as low as GBP35K. However, depending on the apartment dimensions, the price may exceed up to GBP250K-300K.

If you move a little away from Bucharest, excellent and inexpensive residential homes are available in Brasov for the same price as off-plan investments in the capital city. The government is aggressively promoting developmental projects in Constanta. You can really strike some excellent deals here, as the prices are on a lower side still.

In fact, the towns of Brasov and Sighisoara are the fastest growing in terms of real estate development in the country. An airport is also scheduled to be built in Brasov in 2008 and the work on a new motorway joining it with Bucharest will also commence shortly.

The Mountain resorts of Predeal, Sinaia and Busteni present an excellent opportunity for buying villas in the range of GBP50K. The beach resort towns of Mamaia and Costinesti are best for buying studio apartments for regular handsome rental income throughout the year. The rates of studio apartments start at GBP30K. Romanian real estate investment, as the market is on a maturing stage and if you are a long-term investor, there is nothing like Romanian property market. If the projected returns on investments on Romanian property in the next few years are any indication, we are bound to witness a surge of investment activity throughout the country.

However, before investing in Romania, the UK investors are well advised to go through the legal provisions carefully, and plan their investments accordingly.

Romanian airline adds new route

News Posted On: 12 December 2008