The crisis drives properties to lose one third in value

The depreciation is caused by the global financial crisis, which had sharply affected the local real estate sector, making investors think twice before acquiring a property.

In present circumstances, the value of buildings and land plunged to their 2005 levels. The sharpest decline was registered on the retail segment, especially in cities outside Bucharest, where numerous malls were announced. However, developers realized that so many malls cannot be supported by the purchasing power.

However, specialists are expecting the drop in prices to end in 2009. “The value of real estate properties will not decline significantly next year.  It will drop a further 10 percent, and then begin appreciating,” Georgescu said.