Dutch Auction To Sell Housing Units During Timon Fair

The ongoing crisis and the resulting property sales plunge have prompted developers to seek more innovative solutions to secure any customer they can find.

The organizers of the Timon Real Estate Fair will hold a Dutch auction on Sunday to see just how much the market is willing to pay. The Dutch auction will start from the rate card price and go down by up to 15 per cent. A notary will supervise the proceedings.

Upon inaugurating the fair yesterday, the organizers pointed out that the promotional offers available for the duration of the fair were extremely appealing: the least expensive housing unit in Bucharest was a studio, available for 33,000 EUR, whereas the most expensive one was a penthouse with a price tag of 600,000 EUR.

"We did not accept any unreliable developer or any developer undergoing an insolvency or bankruptcy procedure. We only have serious companies, that have delivered already or will deliver in the near future," Timon Fair organizer Vlad Vlasceanu said.

In turn, Ion Catutoiu, the Managing Director of the consultancy firm Real Time, said: "We have conducted a survey for Timon and found that most of the prospective buyers are average income families looking to buy a home for up to 60,000 EUR, as banks are generally unwilling to lend more than that. Thus, the new offer for housing units will have to focus on this type of customers. Developers need to adapt their offer to the current purchasing power."

Catutoiu further said that the State-driven First Home Programme had caused some turbulence on the market by creating false hope: owners of two-room apartments and studios had inflated their price by as much as 25-30 per cent in order to get the maximum available under the State guarantee.

In his opinion, the First Home Programme is an electoral artifice which banks are rather reluctant to accept, a hoax for the developers and an illusion for the buyers. According to Real Time, increasingly more applicants for the First Home Programme are losing their down payment because of time-consuming bureaucracy, while developers are not making the sales they are hoping for.