The Romanian property market

An overview

The Romanian property market

 

Although some people believe that Romania is entering a recession, real estate remains one of the most profitable areas in Romania. There is still a high level of demand for new houses or apartments of better quality then the existing ones.

The average Romanian has quite a lot of difficulty to buy a house or apartment. Normally only those who make more then €1,200/month will qualify for credit to buy a new two room apartment. This means that most young people can't get a mortgage as the average income is €500-600/month.

Currently the main area of interest for developers is Bucharest and the surrounding areas, with most of the largest projects located in the capital. In 2008, specialists expect more interest in a Western Romania, Banat, and Transylvania. These areas have the advantages of well-developed infrastructure and their location in the West of the country. Inward investment means more large factories are expected to open soon.

Prices for land vary from a few euros per square meter (in rural areas) to €4,000-5,000 in central areas of big cities. Price depends on many factors, the most important being the location of land and what it can be used for.

Ownership by foreign nationals

Currently, a foreign national can purchase a property in Romania, but cannot buy land. The common solution to this problem is incorporate a company entity in Romania which the purchaser owns, then make the purchase of the property through the Romanian entity.

As the country has entered the EU, many of the rules and regulations regarding ownership are currently being changed. It is likely EU citizens will have the same rights as Romanians by 2012. Currently, an EU citizen can buy land and property if it is to be used as a primary residence. This can be complicated and does have tax and domicile implications. Before signing a contract, talk with a lawyer who can give you specific information about this subject.


Further reading

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Other comments

  • Damian Galvin, White Mountain, 17 January 2012 Reply

    White Mountain Property

    Good day.

    Useful article, thank you for taking the time to educate the masses on property ownership in Romania. It is now slightly out of date as the laws have changed in favour of foreign buyers. I have covered it in this blog page. I hope it is useful to readers.

    http://whitemountain.ro/blog/2012/01/overseas-buying-guide-for-romania/