Prices of luxury apartments are likely to rise by up to 25% in 2005, after last year when all segments of the real estate market experienced price surges.
"The main reason behind this price increase is the high demand for this type of apartment. In the last three weeks alone, our company has sealed deals worth 2 million euros for luxury apartments," said Cezar Lazarescu, general manager of Rom International Service (RIS) real estate company.
Prices for these apartments are likely to reach 1,800-2,000 euros per square metre, compared to 1,200-1,400 euros per square metre in 2004.
Prices are now approaching the levels seen on the Hungarian, Polish and Czech markets, says Lazarescu.
It is not only luxury apartments that will be more expensive in 2005. In most districts of Bucharest (Drumul Taberei, Crangasi, Militari, Rahova, Vitan and Tineretului), there will be an increase of 10-15% for apartments in already existing buildings, with prices reaching 700-900 euros per square metre, Lazarescu added.
As a result, a four-room apartment in the Piata Unirii area is likely to cost over 120,000 euros.
Another factor that will add to the prices rises seen in the northern part of Bucharest comes in the form of investors and construction companies that are buying land for the development of residential projects scheduled for completion by the end of 2005 or early 2006. Developers are buying the land in this area for between 1,000 and 1,200 euros per square metre.
"The likely mutations of demand on the residential market - in the sense of an increasing supply of new apartment buildings priced at between 700 and 1,000 euros a square metre and built in semi-central areas or on the outskirts - will have a significant impact on the market for apartments in buildings built before 1990," said Vlad Sabadus, general manager of Asco Properties real estate company.
Bucharest has seen spectacular price surges for apartments located in semi-central areas, a trend that is set to continue in 2005 as well mainly due to the coming redenomination of the local currency, exchange rate fluctuations and the inflow of people planning to take up residence in Bucharest, says the RIS research.
The rise in property prices was first felt 2-3 years ago, with market values for residential, commercial and office space skyrocketing by 300-400% in some cases.
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