I do not totally agree with what you say or perhaps I have misinterpreted.
I agree the market has slowed, but the reason for this is the amount of land comodity transactions have now diminished thereby reducing numbers. Apartment sales are also down.
However, I disagree that well located existing properties will fall in price and still continue to drive on. The main losers will be the new properties the market makers have create an illusion of Growth on when in fact these properties have actually grown so much in price that many are now worth what the UK and Irish agents sold them for, not the artificial price these agents said they had grown.
As for the crash you speak of do you honestly think the good stuff in the center of Brasov will crash or do you refer to the new stuff on the peripheral?
Certainly good existing in Bucharest has not fallen in price and rental yields are up. However, if people have bought wrong in terms of location, size and price then it is a natural reaction that they do not benefit from a good investment and it is their recklessness to blame not a failing market.
Also what you say in relation to economy slowing I totally agree with, but these problems are global not just applicable to Romania. The strong point that Romania and especially Bucharest is the fact that there is an under supply of good properties in the market.
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Quote:
Originally Posted by Transylvania Investment
Our experience showed us the local agents are most of the times serious. There are however occasions when one bumps into irresponsible or even naive local agents. The deceitful category you speak of are also part of the landscape, nevertheless if you keep your eyes open and your ears tuned, you will not be deceived.
On the other hand, some of the foreign agents operating here are amazing! They have the nerve to show people crap and despite all evidence to still call it gold. Transylvania Investment had been contacted countless times either by the foreign developer's agents with sophisticated names and blown up advertising budgets as well as by so called "investors" who were looking into free marketing research and not admitted opinion polls.
As for the knowledge of the market, I don't think any of us is the possessor of the absolute truth or as some of us elegantly call it "insight".
The truth is Romanian economy is slowing down, oil and food crisis strike Romania as well, capitals return to the economies that generated them, therefore leave Romania and at the same time "developers" are systematically destroying whatever parcel of green space left in places like Bucharest in order to build some horrific giant constructions. I have never seen so much lack of imagination placed in buildings in my entire life and also I was shocked to see how many foreign investors adored these mammoth constructions and it made me wonder why the hell they criticize Ceausescu for being obsessed with big buildings.
For the developers and agents one of the reasons beside the lack of any aesthetic feeling is the need to make more money out of the plots of land that were already spicy.
To add more hay to the fire if any of the people here think it is normal to pay 5000 EUR/ 1 sq. m. of built space in Bucharest at this time, it means I should stop posting anything and mind my own business.
I think we all agree the market is slow. And we also know that for, I dare say, 99% of these humongous developments the "correction" will be so drastic that would bring some on the verge of heart failure. Perhaps things will start collapsing in August (some little birds gave us some clues in the matter) however we think it's for the best. If the market doesn't adjust now, things will stuck and crush much worse later.
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