A country of 22 million people, this vast region in the Balkans offers an exceptional variety of attractions from Black Sea resorts, castles and fortresses, medieval towns, the world-renowned Carpathian Mountains, and numerous World Heritage sites. It is an emerging market with many
attributes, and a budding economy that is finding its footing following difficult economic times that ensued following the 2007 global crisis, just one year after its ascension as a EU member in 2006.
Many real estate opportunities exist today with prices at their most attractive and affordable levels. With an improving economy it’s time to consider investing in Romania and benefit from a significant opportunity for future growth.
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Prior to 1990, nearly all of the real estate located in Romania was owned by the state. This real estate was owned either directly by the government or by state owned entities. With the overthrow of the Communist regime in that country, there has been a slow and somewhat plodding liberalisation of the real estate laws within the country.
The years under dictatorial control left Romanian in worse economic shape that any other Eastern European nation. In addition, unlike some other countries from the Soviet Bloc, Romania has been slow in digging out for years of repression and economic mismanagement. With that said, there is some light at the end of the tunnel that likely will result in more foreign nationals taking a second look at investing in Romania.
Bucharest is the most significant housing market in Romania where well over 30% of residential activity occurs. Following ascension to the EU in 2006 prices grew exponentially and at peak period (2008) were averaging €2.300/m² today they hover around €1.000/m². During the first half of 2015 home prices in the city centre grew modestly with an increase year on year of 3%, while home prices in the peripheral areas remain under pressure (-4,0%).
The Romanian government has taken certain measures to stimulate this economic sector including a series of incentives to foster home ownership among young people.
Investment Property in Romania
At the present time, individual foreign nationals cannot buy and own real estate in the country. In point of fact, foreign nationals cannot even inherit and then take title to real estate situated in that country. The only manner in which a foreign national can invest in real estate in Romania is through a duly established corporation or limited liability company that is established under the statutes and regulations of Romania.
Residential Real Estate in Romania – Single Family Properties
For the most part, there is no foreign ownership of single family dwellings in Romania at this point in time. Because the only manner in which foreign nationals can take title to and own real estate in Romania is through a corporation or limited liability company, there are very few enterprises that have been established for the purpose of purchasing and taking title to single family dwellings.
In addition, although Romania has been working to establish a more stable market economy in recent years, due to the amount of time that it was under the yolk of a dictatorial regime, the real estate market is shaky. The demand for single family residents is spotty throughout the country. A good share of the more recently built single family residences are not necessarily constructed in a particularly sound manner. In addition, many older properties are in a state of disrepair.
Residential Real Estate in Romania – Apartments
A significant portion of the Romanian population currently dwell in apartments. There has been some movement by foreign nationals to become involved in commercial enterprises — within the parameters established by the Romanian Constitution and related laws — that own apartment buildings or complexes in the country. At this juncture, most investors in such real estate ventures have not made exceptional profits in these ventures. However, there is hope (reasonably placed for the most part) that when Romania is integrated into the EU, the Romanian economy overall and the real estate market specifically will experience growth.
Holiday Property in Romania
Tourism in Romania is not, as of this juncture, a significant industry. Therefore, when it comes to the real estate market involving vacation or holiday properties, there is not a significant amount of activity at this juncture. Up until 1990, foreigners were barely allowed into the country in the country. And, any foreigners that were permitted into the country certainly were not allowed to visit most areas in the country. Up until the 21st century, vacation and holiday travel into Romania almost was unheard of.
In reality, Romania is not without its points of interest when it comes to tourism. However, there remains much to be done in regard to reinvigorating the infrastructure of the country before there can be much of a market in tourism. The government is working on these matters at the present time. Once again, when Romania enters into the EU, there is a high probability that there will be an increase in the number of visitors to the country in the future.