projects have mushroomed across Romania
in recent years and many more are planned.
After passing through a long, often difficult
transition period, Romanias economy is
now moving at a brisk pace. Estimates by the
International Monetary Fund (IMF) show that
GDP growth could reach 6.5-7 percent this year,
and inflation is expected to stay at around
Furthermore, Romanias accession to the
European Union has sparked increasing interest
from international investors, and the current
political situation will not dampen their appetite,
as foreign businesses take a long-term perspective,
according to the IMF.
Romanian Minister of Economy and Commerce
Varujan Vosganian also points to a decrease
in the budget deficit, noting that it is in
line to meet this years target of 2.8
percent of GDP.
The construction industry has played a major
role in the countrys economic growth.
The value of construction works rose 34.9 percent
in the first four months of 2007 against the
same period in 2006, according to the National
Statistics Institute. All types of construction
registered increases during this period, with
residential buildings seeing a 46.6 percent
jump, and non-residential buildings growing
by 35.9 percent.
VOSGANIAN Minister of Economy and
Overall, the construction market could reach
some €10 billion ($13.2 billion) by the
end of 2007, as more E.U. funds will pour into
the country for infrastructure and public building
works. Meanwhile, a host of real estate projects
have mushroomed across Romania in recent years,
and many more are in the pipeline.
A clutch of investment funds have recently
entered the market, spawning a flurry of activity.
In 2006, more than €700 million worth ($929
million) of real estate transactions was recorded.
Analysts expect this figure to reach €1
billion ($1.3 billion) this year on account
of large projects such as Sema Parc and Baneasa.
Minister Vosganian also notes that legislation
has recently been passed to allow mortgage-backed
securities to be listed on the capital market.
The state is also involved in real estate
development. Laszlo Borbely, Minister of Development,
Public Works and Housing, points out that the
state offers 3,000-3,500 flats per year, free
of charge, to young families less than 35 years
of age. We are one of the few countries
to finance the work from the state budget,
he says. In the first quarter of 2007, some
363 such apartments were built.
Public-private partnerships (PPPs) are catching
on, a fact highlighted by the €1 billion
mixed-use Esplanada project that will be built
in the center of Bucharest.
Overall, more and more supply is coming to
the market covering all real estate sectors,
especially residential, which is much needed
in light of continuously growing demand.