The depreciation of the leu sent rent levels up by 15%

The dizzying fluctuation of the leu-euro exchange rate has led to a change in the way rental contracts are negotiated, both by corporate and natural person tenants. Real estate agents of "EuroMetropola" claim that in particular, clients that enter agreements for very short term periods, of 8-10 months at the most, prefer to negotiate their rent in RON, to prevent great fluctuations from one month to the next.

The depreciation of the leu in relation to the Euro has lead to a 15% increase in rent since last summer, for contracts already signed. Thus, if in June 2008 the rent for a 3-room luxury apartment in the North Highway area ( oseaua Nordului) the rent was 10.980 de lei (the equivalent of 3.000 Euros),right now the tenant has to pay the owner 12.810 de lei. According to a press release from "EuroMetropola", the difference will affect first and foremost tenants who negotiated their salaries in lei and pay their rent in Euros.

"EuroMetropola" real estate agents claim that the rental market is currently in a paradoxical situation: even though a drop in prices was expected all across the board for the real estate market, the depreciation of the leu is actually causing some properties to become more expensive.

Despite the fluctuation of the leu-euro exchange rate, the representatives of "EuroMetropola" see no change in the demand for rentals: "At the moment, because of the credit freeze used for funding the acquisition of homes, renting remains the only option for an important part of the population. Those looking to rent would be wise to negotiate their contract in lei, or if they opt for Euro, to have a fixed exchange rate which would not go above a certain level".

Tenants who have ongoing contracts will try to renegotiate their current rent. However most landlords aren"t willing to negotiate, especially when it comes to the payment of a fixed amount in lei.

The effects of the depreciation of the leu are not confined to real estate rentals, but rather they are making their presence felt when it comes to selling properties as well, "EuroMetropola" consultants still show. Most developers follow a price grid in Euros, and payments are only accepted at the exchange valid the day the payment takes place.