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25 march 2024
Vlad Musteata. The Romanian real estate market has gone up, the number of transactions per month increased by 25%

The interview with Vlad Musteata, owner of Proimobil.md and North Bucharest Investments


Vlad, good day. Considering that your companies are actively operating in both the Chisinau and Bucharest markets, it seems you are the right person to interview about the comparison of these two markets. What is more prevalent in the dynamics of our markets, similarities or differences?

Bucharest practically follows the same cycle of recovery from the recent crisis as Chisinau. Due to the war in Ukraine, the Romanian market has also changed. It hasn’t stalled, as sales were happening, but there definitely wasn’t any growth.

But, in Chisinau, as you mentioned, the situation started to revive around August-September last year. What about Bucharest?

It's a bit delayed. I draw a parallel that we are now in Bucharest as we were in Chisinau in September. Only now there are reports that the market is on the rise.

What is the growth rate?

Speaking of North Bucharest Investments, we saw a 25% increase from January to February. We completed 68 transactions in January and 85 in February. Moreover, the average deal value increased from 110,000 euros in January to 140,000 euros in February.

How does it compare to last year?

In 2023, we registered just over 400 transactions, primarily with properties in new residential complexes in the northern area of Bucharest. That’s an average of 40 transactions per month. Another confirmation that the market is growing. Despite Romania being part of Europe and NATO, the mood for most of last year was pessimistic.

However, by November-December last year, the market sentiment began to change. Many investors from Israel started coming. Simultaneously, Arab investors also became more active – wealthy individuals from Syria, Iran, and Iraq.

This year, the growth trigger is also Romania's planned entry into the Schengen area in April. It will replicate the situation with Poland, where after joining Schengen, European investment funds flowed in. Romania might become an even more attractive market for them.

You mentioned the "average checks" in Bucharest for January and February. It seems that Chisinau will soon catch up with Bucharest in terms of price levels?

They have practically aligned already. From my perspective, this is an important psychological barrier. We see that it is now psychologically easier for many of our Chisinau investors to switch to investing in Bucharest.

Additionally, the mortgage market in Romania has revived. The annual interest rate is now 5.5%. We have a reliable partner who helps arrange mortgages for Moldovan citizens who also have a Romanian passport.

The Chisinau market is experiencing significant restraint due to the issuance of new construction permits...

Are you asking about the current situation in Bucharest? It's similar here. There's a good chance that the current mayor of Bucharest will stay for another term, which means that the problems with issuing new construction permits will not be resolved quickly. But, like any coin, this situation has two sides. On the one hand, we periodically lack offers for investors, but on the other hand, the investments are protected from the risk of price declines. Current and future demand will clearly be higher than supply.

What is the minimum period for an investor in Bucharest to realize a substantial profit?

One year is enough. Usually, the construction period for objects is about two years. But it is not necessary to wait for the completion of construction to secure a profit. Another thing is that many investors, after getting a better understanding of Bucharest, decide not to rush to exit. Especially since in those areas of Bucharest where we offer apartments, there is a stable and growing demand for rent. These areas have many English-speaking schools, modern consumer and leisure infrastructure, and all expats and top managers prefer to rent precisely there.

How do you address the staffing issue in Romania? Many Moldovan businessmen complain about Romanian managers…

I can’t say anything new in that there are strong and weak employees everywhere, regardless of the country. Currently, my Romanian office is 90% staffed with Romanian managers experienced in the market, many of whom have worked for developers and understand all aspects of the job thoroughly. Over the last six months, I managed to assemble an effective team, no less efficient than Proimobil in Chisinau.

Now we can confidently say that you have adapted to the Romanian market. What would you advise Moldovan businessmen planning to enter the Romanian market?

Firstly, I am very pleased to already see our developers on the Romanian market, gaining momentum in Bucharest and Brasov. From our side, we are ready to provide comprehensive support to all Moldovan developers considering the Romanian market as a new field for their activities.

As for all our businessmen, my advice is to start entering the Romanian market by communicating with our businessmen who have been working there for a long time. There is a business club initiated by businessmen from Brasov. But we also meet in Bucharest. Initial consultations with "our own" are necessary. It will save from dozens of mistakes and working with "storytellers", who are plentiful in any market. We can always recommend time-tested partners.

The last question – what are the interesting properties in Bucharest in 2024?

We are currently awaiting the market launch of four projects, including the very promising Versace project you wrote about. But we will talk about this in detail when the construction permits are obtained. I hope this will happen soon.

My forecasts for 2024, considering the entry into the Schengen zone, positive sentiments, and mortgage revival – a 20 percent increase in real estate prices in Romania.

Pavel Zingan
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