April
2008
REAL ESTATE
 
Vol. 4 No.3  
 

Lack of accommodation sees rents rise

Pricier than Madrid and in short supply: Bucharest’s rental accommodation is a boom business out of reach for most of the city’s inhabitants
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Few Romanians on an average income can afford to purchase a home in Bucharest, while costs for renting accommodation are also soaring. 
The cheapest three-bedroom flat in Bucharest costs around 160,000 Euro in a city where the average annual income, by generous estimates, is 7,200 Euro per year.
“A tenant is not inspired to rent if he can afford to buy,” says Daniel Prieto, managing partner at Spanish real estate consultancy firm FDP Grupo. “But many Romanians have no choice. They cannot get a mortgage because, even if they earn up to 3,000 Euro per month, a large amount of this cash is undeclared income. Everyone wants to buy, but not everyone can.”
House prices are expected to increase by 15 to 25 per cent this year, because the supply of new apartments is still low. Only 2,500 new units are due for completion this year in Bucharest, according to a study by real estate agency Eurometropola, for a city swelling to 3.5 million people.
Romania has one of the largest numbers of home-owners in the EU. This is because Romanians could buy their property from the state for a knockdown price in the early 1990s. A 70 sqm apartment in Targoviste, Dambovita county, for instance, could be acquired in 1990 for 100,000 old lei – then the equivalent of 250 USD.

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