Developers cut profits in bid to start selling homes again

Home developers in Bucharest have operated significant price cuts over the last few months, which is cutting their profits by up to 50%, considering that in at least 10 residential complexes, starting prices amount to less than 1,000 euros/built square metre, reveals a ZF analysis of the beginning-of-the-year offers. Considering an average construction cost of 600 euros/square metre, a land price cost of 100 euros per built square metre, as well as financial and marketing costs of 100 euros/square metre, the developers' costs amount to a maximum of 800 euros/square metre. Amid a price decline from 1,200 euros/square metre to 1,000 euros per square metre, the developers' margin is cut by 50%, from 400 to 200 euros/square metre. Around 2,500 apartments are still available for sale in the ten residential complexes. However, not all have a price of less than 1,000 euros/square metre, but primarily those for which the buyers are willing to pay a lump sum in advance or at least 50% of the price. "If the home is paid in one, lump-sum payment, we offer a 10% price cut for any apartment within the complex," said Rodica Ciachiris, sales manager of Romfelt Plaza in the Doamna Ghica area, where the average price per built square metre of the 471 apartments is 1,100 euros.