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Bucharest Real Estate Market in 2017

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The real estate market has been shaken after the 2009 recession and Romania’s capital was one of the locations that suffered a lot from it. However, in time, thanks to the speedy recovery of Romania’s economy, the real estate market grew and grew to the point where it achieved the highest increase in the past 5-7 years. The many sectors of the market, from office buildings to the industry have developed and continue to do so, making it a haven for new and old investors.

  1. Shopping centers

One of the first indicators of a healthy real estate market is how many buildings were built and are now being used for commercial purposes in a city. The shopping centers in Bucharest occupy more than three million square meters in 2017, which is a huge increase from the past. In 2016, two new shopping centers were opened in the Romanian capital, Parklake Plaza and Veranda. Parklake Plaza covers a total surface of 70,000 square meters, whereas Veranda covers about 30,000 square meters. The country as a whole has 129 schemes, with 31 existing in the capital city alone.

Parklake Plaza has one low ground floor, a ground floor and a first floor. It is the largest shopping center opened in Bucharest in the past five years and it has spaces dedicated to leisure activities, fashion and a cinema area that boasts 14 screens. It is important to note because the opening of this particular place shows how healthy the real estate market is in Bucharest.

  1. Offices

Another indicator of the health of the Bucharest real estate market is the number of offices that were built in the capital. An entire area, the Barbu Vacarescu area, is now a host to 371,000 square meters in office space, most of which was built after 2009. Before 2009, Barbu Vacarescu was a regular location in Bucharest, but after 2009 it became the area with the most office spaces in the entire capital. At the same time, an addition 265,000 square meters in office space was built and is now in use in the capital city, which it a record in the past 7 years. The Northern part of the capital hosts the most buildings with office spaces, followed by the south and then the western part.

Another record was noted in terms of places that were leased or whose contracts were renewed. Bucharest noted a 37% increase in the demand for new office spaces and a 33% increase in the new leases that were signed all over the city. Another 30% increase was noted in the renewals category, as well as an 11% increase in expansions. All of these pointed to another record in the development of the real estate market.

Renault-Dacia, the famed vehicle developer and BCR, the Romanian Commercial Bank, were the two corporations that leased the most office space in Bucharest.

  1. The Industrial Sector

The industrial sector in Bucharest has been doing well for quite some time so it is no surprise that in 2017, it is still going strong. In Bucharest, 190,000 square meters were built for industrial purposes in 2016-2017, which is much higher than the entire volume that was built during the 2009-2015 period of time. Granted, the real estate crisis that began in 2009 has shaken the real estate market in the entire world, but this increase in 2017 shows that it has healed quite well.

In 2016, the amount of space built for the industrial sector was higher by 7% than that in the previous years. In total, the capital has registered 55% of the total space built in the entire country.

  1. The residential sector

The residential sector did experience 10% price increase, and other factors that affect it have changed so it may raise even more in the future. The salaries have increased, the demand is higher than in the previous years and the interest rates have decreased so there is hope that the number of residential houses that will be built in the future will increase. However, this does not mean that the residential sector has stagnated in 2017. On the contrary, over 10,000 new units were built.

Buildings With Seismic Risk in Bucharest

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Romania has not experienced high level earthquakes in the past few years, with the most devastating one taking place in the 70s, but a recent discovery made by the authorities has shown that almost 400 buildings are under a seismic risk in the city alone. Bucharest is known as one of the capitals with historical buildings everywhere, with a few locations thriving upon this (the Old Town as an example).

Upon an evaluation performed in the last few months, almost 400 buildings need to be consolidated because they are under a seismic risk. For this purpose, the government has decided to send $10 million euros to save at least a part of these buildings. As some may know, because of the latest regulations regarding seismic risk buildings, one of the biggest restaurants in the Old Town has been shut down. According to new regulations, restaurants, clubs and any other commercial businesses cannot function in buildings with a seismic risk, which has prompted many businesses to close shop. The Nottara theater in Bucharest, one of the most widely recognized theaters in the capital has also been affected by the new regulations and starting with November 23rd, the organizers decided to cancel all the shows that were supposed to take place in the original location because of the seismic risk the building was under.

Here are some facts about the buildings with seismic risk in Bucharest:

  1. The Red Stamp

The red stamp is used to signal to the public the buildings that are currently under a seismic risk. Every building in the capital city has been analyzed: from blacks of flats, to restaurants and theaters and other buildings that are currently used one way or another by the people. If you see a red stamp anywhere, you should remember that the writing on it states that “This building has been analyzed technically and placed on a First Class list of buildings with a high seismic risk”.

This list of buildings with a high seismic risk contains 183 buildings all over the capital. The first class risk means there is a very high chance of them collapsing should an earthquake happen in the city.

  1. Bucharest – the most vulnerable capital

According to the statistics, the buildings in Bucharest have been majorly affected by the previous earthquakes that took place in the 1940s, 1977, 1986 and 1990. They have affected their structure and even though they have not collapsed, there is no guarantee that they will not do so during the next earthquake.

Even though Romania is not a country with a high level of seismic risk like Japan for instance, the possibility of an earthquake happening here is not that farfetched. Bucharest is located at about 100-170 km from Vrancea, the area with the most earthquakes in Romania. At the same time, many buildings were built before 1940 using bricks as a base. Because of the weather conditions, the time since they were built and the previous earthquakes, they are in grave danger of collapsing.

  1. The administration’s plan

The plan to modernize the buildings in Bucharest and save those who are currently under a seismic risk involves three steps. 10 million euros have been dedicated to these steps.

The first step involves continuing the building process for 4 buildings that are currently being constructed. The second step is starting the reinforcement process for 29 other buildings. The last step involves analyzing 24 other buildings and developing technical projects regarding 29 other buildings.

Moreover, the same administration approved an extra 735,000 euros for seven buildings for social houses and houses for homeless young people. Three of them are currently located in sector 5, two of them in sector 4, one in sector 2 and one in sector 3. 15 more millions of euros will be spent on projects that involve developing buildings for medical companies (Romania’s medical system is one of the poorest in Europe) and another 21.4 million euros will be spent on multifunctional complexes or buildings that can be used by multiple companies at the same time. These complexes will house schools and other didactic activities and most of them will be built inside or near schools and high schools that already exist in an attempt to boost the educational system as well.

On top of these projects, in 2018 the administration will also focus on:

  • Building five new buildings for kindergartens in Bucharest (in sector 2 mainly);
  • Rehabilitating and modernizing one of the most popular kindergartens in Bucharest (Kindergarten no. 30), a project that will cost an additional 4 million euros;
  • Building 12 gyms, 7 of which will also have a swimming area for students to be able to perform these activities inside their schools and not be forced to go somewhere else. This project will also cost a bit over half a million euros (517,000 euros);

Modernizing and restoring M. Flamaropol, one of the most popular artificial skating rinks in the capital. Once again, the administration will pay an additional 5.4 million euros for this alone;

Buildings With Seismic Risk in Bucharest

Fаctors Thаt Аffеct Аpаrtmеnt Pricе in Buchаrеst

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Purchаsing а homе in Buchаrеst is quicker thаn in thе pеriod of еconomic boom in 2007, аccording to а study prеpаrеd by finаnciаl аnаlysts from Romаniа rеgаrding thе rеsidеntiаl mаrkеt аftеr thе first thrее quаrtеrs of 2017.

Thus, tаking into аccount thе chаngеs mаdе in thе lеgislаtion of thе country, thе recent еconomy growth аnd thе incrеаsеd wаgеs from thе lаst pеriod, mаdе Buchаrеst аnd thе surroundings, onе of thе lаrgеst mаrkеt for thе rеаl еstаtе dеvеlopеrs.

Еvеryonе who wаnts to buy аn аpаrtmеnt in Buchаrеst should know а fеw things bеforе making the purchase.

Thеrе аrе mаny importаnt fаctors thаt you should considеr whеn buying а housе:

– Micro fаctors;

– Mаcro fаctors thаt аffеct thе pricе of thе аpаrtmеnts.

Thе Micro fаctors аrе:

  1. Locаtion – This is thе kеy fаctor thаt impаcts tenants аnd thаt is why аll thе pеoplе sеаrch for а bеttеr locаtion whеn thеy look for а plаcе to stаy (quаlity of locаl schools, proximity to sociаl, shopping аnd rеcrеаtionаl cеntеrs, proximity to locаl еmploymеnt opportunitiеs);
  2. Updаtеs аnd Upgrаdеs – Whilе somе buyеrs аctivеly sееk out fixеr-uppеr propеrtiеs, most homе buyеrs prеfеr а housе thаt is movе-in rеаdy – аnd thеy аrе willing to pаy а rеаsonаblе prеmium for thаt comfort. Modern furniturе, new kitchеn аnd bаthroom аrе аmong thе most importаnt upgrаdеs for homеbuyеrs bеcаusе thеy rеprеsеnt а mаjor еxpеnsе (аnd hеаdаchе) if thе buyеr hаs to upgrаdе thеm.
  3. Area propеrty prices- Compаrаblе propеrtiеs, sold in thе аrеа you wаnt to buy аlso impаct your own homе’s mаrkеt vаluе. Аpprаisеrs аnd rеаl еstаtе аgеnts look аt rеcеnt sаlеs of homеs with similаr fеаturеs to usе аs а bеnchmаrk аgаinst your homе’s potеntiаl pricе. Forеclosurеs аnd short sаlеs oftеn complicаtе things bеcаusе thеy tеnd to sеll аt lowеr pricеs, dеcrеаsing thе nеighborhood’s ovеrаll аvеrаgе sаlеs pricе.

Mаcro fаctors thаt аffеct аpаrtmеnt pricе:

  1. Thе Еconomy – Thе strеngth of thе ovеrаll еconomy significаntly impаcts thе rеаl еstаtе mаrkеt аs consumеrs’ аbility to support housing pricеs lаrgеly dеpеnds on kеy fаctors likе GDP, unеmploymеnt, аnd incomе growth.
  2. Finаnciаl bаnking progrаms – This is а kеy fаctor in how mаny аpаrtmеnts аrе sold аnd how mаny crеdits thе bаnks cаn offer. Thе „First Housе” progrаm known аlso аs „Primа Cаsа” is thе bеst bаnking progrаm so fаr for thе young pеoplе in Romаniа.

Othеr Fаctors

Of coursе, thеrе аrе somе othеr fаctors thаt dеsеrvе еxtеnsivе covеrаgе, but thе following summаrizеs somе of thе mаjor onеs:

  • Thе mortgаgе intеrеst tаx hаs аn еnormous impаct on homе vаluеs – it’s frее monеy for homеownеrs аnd drivеs up propеrty pricеs by аs much аs 25% by аltеring thе pеrcеivеd аffordаbility of homе pricеs;
  • Locаl buildеr аctivity, zoning rеstrictions, аnd locаl rеgulаtions dictаtе nеw homе supply аnd pricеs;
  • Proximity to pаrks аnd plаygrounds, noisе pollution, light pollution, аir quаlity, intеrnеt connеction quаlity, trаffic volumе, roаd quаlity. Most prospеctivе buyеrs hаvе customizеd lists of fеаturеs аnd sеrvicеs thаt аrе pеrsonаlly importаnt to thеm.

 

Thinking Аhеаd

Rеаl еstаtе pricеs аrе dееply cyclicаl аnd much of it is dеpеndеnt on fаctors you cаn’t control. Whеthеr you plаn on buying а nеw propеrty or an apartment in old building, it is importаnt to аnаlyzе mаrkеt conditions аnd that spеcific propеrty to dеtеrminе how thе homе’s vаluе mаy vary ovеr thе coursе of timе.

The Most Expensive Apartment in Bucharest

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contemporary design of penthouse main room

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.

Vacant Lots Grow In Popularity As Prices Stay Stable

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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.

Bucharest’s National Peasant Museum

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Bucharest, the capital of Romania boasts some of the most impressive and diverse tourist attractions the country has to offer. From historical churches to beautiful parks or scars from the country’s dictatorial past you will find it all in Bucharest.

The capital city also offers some stunning museum that tourists can visit while spending time there. One of the most interesting and authentic is the Romanian Peasant Museum, which boasts a huge collection of traditional Romanian art, unique sculptural elements and even architecture.

The Romanian Peasant Museum is under the patronage of the Ministry of Culture and is part of the Museums of Popular Art family that spans across numerous museums and cultural institutions within Europe.

The Museum is located in one of the best areas in Northern Bucharest, being surrounded by numerous other attractions while also being in close proximity to the historic district of the city. The area provides a lot of parking space and is well supplied with public transport stations, including bus and metro stops.

The museum is composed of an indoor series of exhibits as well as an outdoor part which stretches over one of Bucharest’s most interesting green spaces. The building which hosts a lot of the artifacts of the museum is built in the traditional Neo-Romanian style, being in itself a unique part of Romanian traditional culture and architecture.

The interesting exhibits and presentation as well as the rich historical background was rewarded in 1996 with the European Museum of the Year Award. The museum isn’t restricted only to what it can offer on its premises as it also publishes a number of interesting magazines while also organizing unique events such as the Missionary Museum or a series of Village School concerts as well as other conferences and special exhibitions.

Besides numerous unique historical objects and tools, the museum also boasts a rich collection of classic peasant building from all areas of Romania. Among building styles included in the exterior collection visitors will find influences from regions like Transylvania, Moldova, Dobrogea or the old kingdom of Walachia.

Among the exhibits in the interior wing of the museum tourists can find a series of utilitarian and artistic objects that peasants used throughout the last five centuries in the Romanian principalities. These objects include kitchenware, clothing as well as tools used to work the land or with animals. All objects come with a well-researched and historically accurate description.

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