The land market in Bucharest, the city with the highest prices, stagnated in 2008, after 50-400 percent annual growth rates in previous years. The only cities in Romania which continued to grow throughout 2008 were Iasi, Brasov, Constanta, and Craiova, while in Timisoara and Cluj-Napoca, the price of land began to slide as of the beginning of 2008, according to a study made by the Darian valuation company.
“From 2007 to mid-2008, the price of land doubled everywhere in Romania, because there were buyers on the market. As of six-seven months ago, nothing has been sold anywhere, except a few small transactions. Supply continues to rise, but there are no buyers for plots of land, even at half the price,” said Shimon Galon, Chief Executive Officer of Globe Trade Centre Romania, that is developing one of the most important shopping center networks countrywide in cities such as Arad, Suceava, Galati, Piata Neamt, Buzau, and Bistrita.
Highest price hikes were registered in Brasov and Constanta, two cities targeted by most mall and home developers. In Brasov, the minimum price of a plot of land rose by some €200 in 2008, to €477 per square meter, while in Constanta, the same plot of land registered a €100 rise, to €790 per sqm. Most significant price cuts were observed in Cluj-Napoca, where the minimum price fell €70 last year, to €324 per sqm.
Galon said that very good plots of land are now on the market but nobody has the funds to make acquisitions, and even if they did, they do not know what to do with them. “If the government does not know how to lead the economy towards rebound, the market alone has no power,” the company official said.
