Land and New Apartment Prices Down 25%

The ongoing liquidity crisis is affecting both real estate developers and customers as the price for newly built residential and office buildings is decreasing significantly. The price of land is decreasing, too, especially in the northern part of Bucharest, for the same reason. For quite a long period of time, buyers preferred not to make any move, so developers suffocated by the liquidity crisis and owners urgently needing money decided to lower prices to improve their chances to sell. Prices on all segments of the real estate market decreased by 15-25%, according to a press release from EuroMetropola. Land in downtown Bucharest remained relatively constant, with only a 5-10% decline. In the south of Bucharest, land owners are more confident in the future achievement of major investments such as a new airport and the Danube - Bucharest Canal, than in the present danger of the financial crisis, so prices did not decrease at all. Land in that area is still available for 2-3 EUR/square meter, generally not negotiable.

The situation is entirely different in the northern area of Bucharest as prices in Pipera - Tunari dropped sometimes by as much as 50% from approximately 900 EUR/sqm to even 400 EUR/sqm. In Baneasa, prices dropped from 450 EUR/sqm to 290 EUR/sqm. EuroMetropola gave the example of an apartment building in Baneasa, which was selling for 2,500 EUR/sqm and is now available for 2,000 EUR/sqm after two months when no sale was made.

"On Barbu Vacarescu Boulevard, we have an office building initially offered for lease for 17,000 EUR/month. After three idle months, the owner is ready to accept 13,000 EUR/month. It"s a fairly large building and that makes it even harder to rent, because companies are reluctant to pay more than 10,000 EUR/month, because their future business is unpredictable because of the financial crisis," EuroMetropola added.

In Pantelimon, the rent for office space dropped from 18 to 16 EUR/sqm/month, but owners will definitely accept 14 EUR/sqm/month as prospective tenants are scarce.