Fri, 14 Sep 07
Romania currently has one of the most dynamic economies in Europe, claims Property Secrets...
It has a population of around 22 million people many of whom are working their socks off to improve their lives.
The property market started a further growth spurt after the government changed the law in April 2006 to allow banks to lend on property up to 75% LTV to local residents.
Since joining the EU at the beginning of 2007 many mortgage restrictions have been removed.
Currently it is possible to obtain mortgage finance up to 75% in Romania as a foreigner, though it is expected over the next year many more banks will bring products on to the market and thus mortgages will become increasingly competitive.
Large foreign investment
The rental market has so far mainly been targeted at the luxury/expat sector and yields have been high (up to 15%). How the new build rental market is targeting the middle classes is not yet as clear.
Until recently there was very little new building in Romania and hence much of the current housing stock is in very poor condition indeed. As demand is starting to pick up this in inevitably leading to a major lack of supply and prices are rising quite significantly.
Foreign Direct Investment (FDI) into the country is high, creating many jobs, which has lead to surprisingly low levels of unemployment in the cities. The economy is performing well and GDP growth is above 7%.
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