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Land prices continue their downward trend

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Claudia Ariton
With investors becoming more selective and less willing to exceed budgets amid a weak economic backdrop, Bucharest's land market has seen a significant decrease in prices over the last two years and it is expected to shed another five to 15 per cent on average in 2012, experts say.
Sinziana Oprea, senior associate with Colliers International Romania’s Land Department, told Business Arena that in some of the more attractive areas of the Capital prices had already reached bottom. “These categories take into account areas like Charles de Gaulle, Aviatorilor, Aviatiei, Barbu Vcrescu and Calea Plevnei”. She further added that “peripheral locations, as well as areas with limited development potential, such as lack of or poor infrastructure, continued to experience decreasing prices, down 35 to 40 per cent compared to 2010”.
Florin Nine, manager of Regatta Real Estate’s Projects & Investments Department, said that Bucharest had plots of land valued even below 50 Euro per sqm in undeveloped areas, while prices in the north and center could reach up to 2.000 Euro per sqm. These price extremes are determined by location, vicinity of facilities and other urban factors. Investors are generally interested in acquiring land within city limits, located in central and semi-central residential and commercial areas. They are also interested in taking over construction projects that have not been finalized by their developers due to financial difficulties. “Although prices have gone down significantly, clients are still selective and the amounts they are willing to spend are determined by strict budgets. That’s why, even when land owners are flexible, transactions can span over long periods of time,” said Nine. He also said that land demand was directly influenced by the offer of bank loans. Therefore, this aspect, doubled by signs of economic recovery might trigger more transactions in the land segment by the end of 2012.

To read the full version, see the print edition of Business Arena.

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