Demand for new properties in Romania’s capital city have increased tenfold when compared with pre economic-crisis levels according to recent market analysis, with the main reasons for the rise in demand being increased competition between developers and end products with a higher degree of quality.
Demand for newly constructed apartments has grown by a whopping 1000%, with 2015 showing a segment of 35% of all buyers up from 3% back in 2009. Prices also play an important role in this astounding increase of demand.
The pre-crisis market looked at newly constructed buildings as expensive, exclusivist items which most people didn’t have access too. New apartments were targeted at high net worth individuals even though the level of quality and detailing didn’t even come close to luxurious.
After the economic crisis passed and the job market and banking sector recovered, developers varied their offer and crated project which also appealed to the middle class.
Increased competition between developers has also led to a significant decrease in prices, making new apartments even cheaper than communist era ones, which can be as old as 50 years in some cases.
According to most analysts and developers, the market value of old apartments can rarely be maintained and will mostly go down, while newly constructed apartments can better suit modern needs, have a higher degree of quality, better finishings and will also grow in value as better infrastructure is built around new residential areas. New residential area developers can also include advantageous offers for customers who meet certain requirements, a detail which old apartment seller can’t match.
A good reputation has proven quite important for a project to sell out quickly and while initial projects were often plagued by quality issues that problem seems to have been solved. Developers have increased the overall quality of their new apartments in order to attract more customers as well as get an advantage on their competition.
According to recent market research the most popular apartments in Bucharest are those with 2 or 3 rooms with a price below 60.000 euro. The reason behind this seems to be that most customers are made up of young families. The price difference between 2 or 3 room apartments has also diminished so larger families can now easily upgrade. According to market research 62% of buyers are willing to pay up to 60.000 euro, 30% are willing to pay between 60.000 and 100.000 euros while only 8% are willing to go over the 100.000 euro mark.