Analysts say correct housing index is unlikely

Real estate market analysts agree that a housing price index should be established, but they estimate that such an index cannot be accurate as the prices of apartments are often undervalued in official documents.

The real estate market in Romania is not regulated. Real estate transactions are made through notary offices, which are in the best position to provide real prices, according to the Governor of the National Bank of Romania (BNR), Mugur Isarescu, recently. Isarescu said he planned to meet notaries to discuss real estate prices, which he described as “scary.”

Analysts indicate that because there is a significant tax to be paid to the state for a real estate transaction, buyers and sellers agree to declare much lower prices when closing a deal, to ensure that taxes are lower. “Under these circumstances, the data registered at notary offices are below the real level,” according to real estate analyst Radu Zilisteanu for NewsIn. “I am afraid the valuation will not be correct. Furthermore, there have been so many statements related to this market, from BNR, the Competition Council, and even the Economy Ministry, saying that they will look into the real estate sector,” Zilisteanu said.

Real estate prices have risen a very much in the past few years, boosted by high demand and growth of the mortgage segment.

According to Zilisteanu, the housing price index can be useful, but the real estate market can only function on the demand-supply basis.