What should we expect to happen on the Romanian real estate market by comparison with the experience of Hungary given the upcoming accession of our country to the EU? Nothing spectacular. A relatively moderate growth toward the end of this year and a continuation of already existing trends, at least this is what the Hungarians have experienced.
"Similarities between the Hungarian and the Romanian real estate markets primarily derive from the fact that most flats are privately owned, not rented, as a direct effect of the rapid privatisation that followed the change in political regime. In mid ''90s, Hungary witnessed an ascending trend, with attempts to bring prices to European levels, but this phenomenon toned down several years ago, and the prices have not risen that much from that moment on," stated Laszlo Diosi, deputy CEO with OTP Bank Romania.
According to OTP Bank representatives, in Budapest prices of new flats at present range between 958-2,300 euros per square metre, with significant increases being registered only in certain areas.
"One can notice the fact that at present, prices of Romanian properties have got close to the levels of EU member states, in the context where incomes are several times smaller. In Cluj-Napoca, for instance, the sale price for a new building ranges between 700 and 1,300 euros per square metre, while in Bucharest the price per square metre ranges between 600 and 2,000 euros," states Doru Lupeanu, marketing manager with Grup de Lux.
Others are sceptical with regard to the "lesson" we can learn from the experience of the Hungarian real estate sector. In the opinion of the representatives of the trade office of the Hungarian Embassy in Romania, the developments on the Hungarian real estate market, before and after integration, cannot be compared with what will happen in Romania.
"I do not believe that the phenomena witnessed by Hungary and the development trends of the Romanian real estate market can be identical, because the two countries started off from different macroeconomic foundations toward EU integration," said Bogar Ferenc, economic adviser with the trade office of the Hungarian Embassy in Romania.
He added that Romanians should not expect any miracles in the real estate domain after integration because their expectations may not come true.
"In Hungary, for instance, ahead of integration there was an intense state of expectation, which translated into the fact that the real estate market banked on a considerable advance in prices. Starting from this hypothesis, some investments and acquisitions were made before 2004 to the end of making profit. What happened after integration, though, did not confirm expectations of a sudden price increase," specified Bogar Ferenc.
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