Residential constructions in Brasov, abandoned or postponed

• The greatest real estate complex in the city has cut more than half than its number of employees and has dropped two of the three blocks it had begun building in summer

The hottest sector of Romania"s economy - construction - has been hit hard by the economic crisis. Braşov"s construction sites haven"t been spared by the recession either. Most of the projects have been slowed down or have been postponed in wait of better times. The workers are being let go and they are afraid for their livelihood. Buyers that were almost fighting over homes are now hard to come by. Banks no longer grant loans and they are causing developers to padlock their sites. Developers that haven"t laid the foundation yet have put their projects on hold and are waiting for the end of the crisis in order to come out unscathed.

Case in point, Braşov Garden, which was widely touted as being Braşov"s greatest residential complex, located in the Tractorul area. The project"s developer, an Israeli company, was hoping, at the beginning of the year, to begin construction of over 700 apartments in a residential area with its own kindergarten, a park and mall. Three months after the beginning of the works, two of the blocks have been abandoned and work on the third has been significantly slowed down. The bank backing the project cut their construction budget, arguing the lack of buyers. Only 15 customers have been willing to ignore the financial crisis and sign contracts for apartments in this residential area.

The construction company that launched the project, SC "Grup Taurus" SA of Bistriţa, hasn"t paid its workers on time and has been forced to give up on half of its team. The remaining workers can"t afford to pay their installments because they"re not getting their money on time and they are afraid about being laid off. After the winter holidays, "Grup Taurus" will send its workers home on technical unemployment or will lay them off permanently. The crisis is driving away the few apartment buyers left, who fear that their homes won"t be ready on time, or worse, might never get done at all.

Cătălin Grigorescu, the site supervisor, stated: "The work is 50% halted. We lost funding for two of the three blocks we had begun working on. This is caused by the weak sales, and the bank has limited our funding. The bank won"t lend us money because the apartments aren"t selling any more. They told us to slow it down. While before we were getting three floors done in a month, right now we can only finish one". The only block that work is still being done on is the one with 65 apartments, out of which 15 have been sold. In case no new customers are found, the construction of this bloc might be cancelled.

Mr. Grigorescu further added: "It"s true we were late with the salary payments, but we did pay them in the end. That"s not a thing to be taken lightly. At worst you can postpone paying your partners, the companies that you"re buying construction materials from. But people"s wages are not to be trifled with".

The workers are unhappy, but they refused to issue any statements, most likely because they were afraid they"d get fired. These people come from all over the country, and they even came back from Spain to work in Braşov.

The representative of "Grup Taurus" remains optimistic. He feels that in spring things will go back to normal. Real estate agents estimate that transactions will resume in less than a year. In order to counter the effects of the crisis, the developers of the residential complex Braşov Garden have launched promotions. "For every apartment purchased, the owner gets a parking spot in the underground parking lot and a cellar for free", emphasized Cntnlin Grigorescu.

Braşov Garden buyers have no guarantee they"ll receive their homes on time. Due to lack of funding, the works have been put on hold or are progressing at a far slower pace.