Why invest in Romania? Convergence of factors creates growth market
As the global investment climate has changed significantly, 2010 is in our view a buyer’s year and will provide increasingly attractive investment opportunities. We are confident in the long term prospects of the Romanian property market and believe that over the long term, the market is in a strong position to deliver strong investment performance. Below are some of the key factors we think will drive market recovery and growth from 2010:
Factor 1: Growth potentialWith 22 million people, EU membership and consistent, above-average economic growth, Romania continues to be one of Europe’s investment hot spots. Whilst 2009 brought an expected contraction due to the global economic downturn, growth is expected to resume in 2010 and continue for several years. Bank Of America Merrill Lynch forecast average growth of 4.4 % for the 2010-2019 decade.
Factor 2 - EU fundsIn its 2007-2013 budget the European Commission allocated approximately €30 billion in structural funds for Romania. A considerable part of this capital will be used to improve the country’s infrastructure. Some of the key transport infrastructure projects are:
- Transylvania highway ¬- 415 km, €2.8 billion
- Pan European Corridor 4 - 679.1 km, €4.87 billion
- Bucharest ring road - 45 km, €291 million
- Airport expansion and modernisation: Bucharest, Cluj-Napoca, Sibiu, Iasi and other major secondary cities
 Factor 3 - Foreign Direct Investment
Romania offers an important combination of benefits for large international investors, including but not limited to:
- The size advantage: a market of over 22 million people
- The language advantage: a country with excellent knowledge of English, French, Italian and German
- The cost advantage: labour costs are still amongst the lowest in the EU
Companies such as Nokia, Microsoft, IBM, Oracle, Amazon.co.uk, IKEA, Orange, Vodafone, Glaxo SmithKline, Renault, Ford, General Electric, Pirelli, Continental, Eurocopter, have considerable investments in Romania.
Factor 4 – External remittances The Romanian property market is expected to receive a significant boost from the money transferred to their homeland by the over two million Romanians working in Europe, mostly in Spain and Italy. The majority of these funds are directed to the property market to buy a property or land for the expats’ eventual return to Romania. This demand is going to be an important catalyst for the growth of the property market over the next decade.
Factor 5 - Emerging Real Estate Market Romania's property market had a strong rise between 2004-2008 and it achieved a commanding status as one of the best performing markets in the world. We expect that after a healthy correction during 2009 a recovery will start in 2010 and a return to sustainable growth in 2011. The fundamentals of the property market remain strong in our opinion, with low levels of new supply, low mortgage penetration, increasing buying power and demand.
Comprehensive market analysis These are some of the key factors behind the future prospects of the Romanian property market, but other influences must also be considered. For a full account of the dynamics of the market contact our office by phone on 08701 453 853 or email
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For in-depth market analysis These are the key factors behind the impressive growth of the Romanian property market, but other influences must also be considered. For a full account of the dynamics of the market:
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