Although most investors perceive Bucharest as cheap, the city does have its luxury properties. The current most expensive apartment in Bucharest costs a whopping $3,800,000 and can make even the most exuberant buyer blink.
The apartment is located on the 4th floor of a 5-floor building and includes 7 rooms and 5 bathrooms. A total living area of 450 m2 is more than generous given the fact that typical block apartments rarely manage to go past 100 m2. The penthouse is fully furnished with the best materials, and the price reflects that no compromises were made here. The offer also includes 3 parking spaces. Because it was built in 2011, the structure is in line with more recent building codes and offers a guarantee of safety and reliability.
There is no surprise that the most expensive real estate intended for a single family is located in the Primăverii Neighborhood, in the northern part of the city. The area managed to build quite a reputation for itself and accounts for an important percentage of the total price. Primăverii was established as a retreat for the wealthy and privileged since Communist times. Even now, the elite of the Romanian society can be found here. Entrepreneurs, specialists or even showbiz personalities appreciate the advantages offered by the neighborhood. A quick stroll through Primăverii makes most think of prime residential areas from cities like Berlin or Vienna.
Located on a small peninsula that protrudes in Floreasca Lake, the property offers a magnificent view of Bordei Park and is minutes away from Bucharest’s biggest park, Herăstrău. However, a quick tour of the horizon can confuse the ones not familiar with the cityscape. Because all of the adjacent properties have generous green spaces, the building appears to be a “relic” of urban development surrounded by green. Primăverii is an oasis of tranquility that has nothing to do with the noise, pollution, and overall commotion that is characteristic to the vast majority of other areas. The low density of constructions, as well as the small height regime highlights that quality reigned over quantity here.
The apartment is clearly not for those that like to depend on the public transportation system. The 12-minute walk separating it from the nearest metro station and the absence of nearby bus stations come as advantages. The street is closed to non-residents. However, the location offers a quick gateway from the city because of its north position.
Selling the most expensive apartment in Bucharest was a job left at the hands of Coldwell Bankers. As of February 2017, the property is still available for sale, and given the growing demand felt on the market, the price will most likely see a steady rise in the future.
While the real estate market has been stagnant for the last couple of years with little to no action being registered, 2014 brought a huge change in the market with 2015 leading the way to more development. While condominium sales have had a small yet steady rise since the end of the financial crisis, land sales have plummeted, with little demand for residential or industrial properties being the main reason.
A recent analysis on the state of real-estate industry has shown that the past two years have seen a resurgence of vacant lots demand; suitable for condo or individual home builds. The study tracked online searches for vacant lots as well as price oscillations in the past 12 months for lots found at the edges of Romania’s big cities.
Demand for this market segment grew as a whole with prices remaining pretty much stable, the only exception being noticed for medium priced lots which registered modest growth.
At the edge of most of Romania’s major cities land price is generally under 50 euros per square meter. The price goes for lots outside Bucharest as well which was known to have a significantly more expensive market than the rest of the country.
Iasi, one of the largest cities in the country after Bucharest and the largest in the historic region of Moldova has registered the most significant growth in terms of online popularity for vacant lots since the spring of 2014. The number of online searches has grown by a whopping 183 percent even though actual demand is still rather low. Prices have varied by only 1 percent with the smallest asking price per square meter being found in the Popas Pacurari area at 8 euros per square meter.
Vacant lots in Bucharest and its surroundings have registered on online growth of 79 percent in the last year, being the second in terms of growth. Demand has also grown by a significant amount, being the largest in the country in the country with 78 percentage points larger than the following city, Brasov. Prices have stayed pretty much the same with an increase of just 2 percent. Prices start from 45 euros per square meter on lots 900 square meters in size located in the Militari-Chiajna neighborhoods.
In Brasov, one of the major tourist hotspots in the country demand stayed relatively low at 18 percent while online searches grew to the second spot after Bucharest. Brasov was the only market where prices went down with a decrease of approximately 11 percent.
The real estate market in Bucharest and the rest of Romania registered an impressive growth in 2014, despite what some specialists predicted as another year of stagnation. The new optimism found in the market has led to investors reconsidering or restarting projects which were flat-lined when the financial crisis hit the country in 2008 and 2009.
The Spanish developer Hercesa for example has announced it will restart investments in the Vivenda Residencias project located in the eastern part of Bucharest. This would mark the third part of the project and will mean that work should begin on 66 apartments consisting of 2, 3 and 4 bedrooms.
The project was started back in 2007, with 420 apartments being built and sold in the meantime. The Spanish company announced a new stage in the project, with work scheduled to begin sometime between August and September 2015. This new phase would have 2, 3 or 4 bedroom apartments with no studios and will consist in 66 units.
Hercesa has already announced the price range for the new Vivenda Residencias apartments. They start at 55.400 euros without VAT for 2 roomed apartments with 46 usable square meters. A price of 83.000 euros without VAT will be asked for 3 room apartments with a surface of 74 usable square meters. The site is situated in the Eastern part of the city on Basarabia Boulevard. When completed, the Vivenda Residencias project should offer 1.400 high-end apartments, dedicated to middle and upper class income individuals.
According to market analysis, Hercesa came onto the Romanian real-estate market back in 2004. It is estimated that since then the Spanish developers have spent over 150 million euros on land and development. Hercesa sold a 13.000 square meter plot of land next to the Basarab Bridge and Carrefour Orhideea to an association of local businessmen in 2014. The Spanish developer was initially planning on starting a new residential project in the area but plans were suspended when the financial crisis started and were never picked up. The transaction value wasn’t made public, however, market specialists estimate that the total cost exceeded 5.5 million euro.
The same Spanish developers inaugurated the Cismigiu Hotel back in 2014. The hotel is set in a stunning historical building in Bucharest’s center. The total investment is estimated to be around 15 million euros with income for the first year being expected to be between 1.5 and 1.8 million euros.
The real estate market in Romania and especially that in its capital city, Bucharest, has registered impressive growth in the last year with expectations for 2015 being quite high. After a period of seemingly endless stagnation with little to no reason for optimism, it seems that the real estate market registered a much needed growth in 2014. While there are numerous reasons behind the growth, some of the most important are the reduced price for basic materials, the abundance of qualified and unqualified labor as well as the easier to obtain funding and state run projects that aimed to encourage young home ownership and the market in general.
Spring 2015 has also led to more growth with March showing a rise in the number of construction papers released by state authorities with a total of 3.253 being released according to the INS (National Statistics Institute). Of these 3.253 authorizations 62.3 percent were released for rural housing, marking a clear trend that shows crowded city dwellers are retiring and moving to the less polluted, less dense rural part of the country. According to the INS, growth has been registered in all regions with the most significant being in the capital city, Bucharest.
Growth in Bucharest and Ilfov County is marked by an extra 238 released authorizations. The second development region in Romania according to INS data was North-East with an extra 144 authorizations while the Center Region registered a growth of 134 build authorizations. Sud-Muntenia Region had an extra 124 authorizations while the North West Region had a growth of 120 authorizations.
Residential building authorization has also registered impressive growth with the richest regions in the country having the most new projects. Bucharest and Ilfov County lead again with an extra 90 residential building authorizations followed by North East with an extra 53 authorizations, North West with 40 authorizations and South East with an extra 3 authorizations. Decreases were registered in the South West Region with 56 fewer authorizations, South Muntenia Region with 21 fewer authorizations and the Center Region with 9 fewer authorizations according to data from the INS.
Requests for authorizations have also grown in the first quarter of 2015 with 7.176 new documents being found, marking a 3 percent rise from the first quarter of 2014. Growth was seen for Bucuresti Ilfov with an extra 152 authorizations, North West with an extra 114 authorizations, North East with an extra 99 authorizations, South East with an extra 83 authorizations as well as South Muntenia with an extra 32 authorizations.
A good neighborhood doesn’t just improve the day to day life of its inhabitants but also guarantees that their property will maintain its market value or even increase it. It also guarantees that said property can be sold for a profit, regardless of market conditions or demand levels.
Despite popular belief, a good neighborhood isn’t necessarily a centrally located one or an exclusive and detached one either. A good neighborhood can be called that when it has shown consistent good value for sellers, better than median value, regardless of market conditions.
The time-old real-estate saying “Location, location, location” is as accurate as ever and is certainly the motto that most successful investors follow when buying property, be it in the form of apartments, houses or land. While price is also an important factor, a good price in a bad area can quickly lead to a failed project or reduced profits in the long run.
Real estate experts say that while price is the most important aspect for customers, they should consider the state and location of the property equally important. Even the communist neighborhoods can be considered premium if they can compensate the quality of the architecture with other factors such as parks, good schools, safety and good infrastructure. A good neighborhood isn’t necessarily an exclusive one, or one dedicated to high net worth individuals. Certain communist built neighborhoods registered great transaction rates even during the toughest period of the financial crisis.
Real estate agents generally give the 1 Mai to Mihalache Bulevard example which mixes older buildings with communist condominiums. The good mix of middle and upper class inhabitants, numerous parks, good accessibility to the center of Bucharest as well as numerous public transport routes make it a great investment. The fact that apartments have been sold even during the toughest years of the financial crisis in the area is also an argument that real-estate agents frequently mention to potential buyers. Numerous other sectors and regions in the city have reduced prices and still haven’t managed to sell during low market conditions due to low demand; this is not the case for the 1 Mai – Mihalache Boulevard zone.
Newly built residential areas are controversial as some lack the quality of life, commercial diversity or infrastructure and proximity to the city-center that older neighborhoods have. This isn’t always the case as some projects have grown into well-developed neighborhoods which thrive on the larger and newer look of their buildings.
Real estate markets are predictable and work according to graphics. Crises can usually be forecasted by analyzing other markets that have gone through similar evolutions and so are recoveries from crisis. 7 years after the big crisis Bucharest’ real estate market underwent in 2007, the year 2014 seems to be a bit more optimistic than the previous ones.
Studies have shown that every seven years property value increases by about 10%, no matter how difficult the period was. This is not exactly the case for the Romanian capital city’s real estate market. While prices dropped drastically in 2007, the economic crisis did not allow them to recover so soon and they certainly did not improve compared to the beginning of the crisis. However, the specialists agree that 2014 will mean a return to the same issues the real estate market met back in 2007 as bank started to grant mortgages again, either via the First Home (Prima Casa) project or for small companies.
As soon as the banks grant credits, the investors tend to absorb it. The only difference now is that people are more cautious and real estate analysts are optimistic that the inflation rate this market knew between 2005 and 2008 will not be achieved again in 2014. The same voices state that the crisis the global economy underwent during the last years, the wide spread of the internet and of other communication means made people wiser and will forbid such a phenomenon from happening again.
In the long term, prices have increased, compared to 2007, and the real estate has proven to be one of the most stable in terms of investment. But it’s true that sometimes whether you invest in a property or another, this makes a whole difference in terms of profit. If a few years ago office building and land were the most profitable real estate investments, in 2014 residential complexes are the most stable.
Although on an ascending trend, real estate prices are not to grow in 2014 at the speed they rose a few years ago. Economists are confident we will not have two figures price differences at the end of the year. Although there will be variations, they will not be huge and this will mean less profit for some parties, but also more stability on the real estate market in general.
The best real estate investments in Bucharest for 2014 seem to remain apartments, whether brand new or second hand, but very well maintained and completely renovated and redone to contemporary standards. As the buyers become more informed and more discerning the standards on the real estate market are raised and the whole sector becomes more professional.