Romanians turn to the banks to buy a house. Real estate expert: “The market has recovered after the elections”

High inflation makes the real estate sector the main target for investment, with tangible assets perceived as the surest guarantee of value over time. Regardless of the segment, Romanians' appetite for purchases remains high. On the one hand, investors are looking to secure their capital, considering the real estate market to be real “gold”, and on the other hand, ordinary people are increasingly turning to banks to secure a home.

Real estate. PHOTO Freepik

Recent data indicates a clear orientation of buyers towards banks. If last year half of the transactions involved own funds, currently 58% of purchases are made through loans with a real estate guarantee, and estimates show that this percentage will reach 60% by the end of the year. Although the total number of transactions fell slightly, by about 3%, the value of mortgage loans increased, suggesting an increase in the price of units sold or more consistent lending per property.

In parallel, the developer market is going through a process of forced “professionalization”. The new legislative regulations, aimed at eliminating speculative practices, will put out of the game the small opportunity investors who were building without expertise and without solid financing. Those who remain will, however, pass on compliance and credit costs into the final price.

Eduard Uzunov: “Real estate has always been gold”

Beyond the mass credit market, the premium and luxury segments follow a different logic, dictated by inflation and the uniqueness of properties. Eduard Uzunov, founder of Regatta Real Estate, points out the major difference between the general market and that of exclusive properties.

“It indicates that inflation generates investment. However, banks that have more or less confidence in the real estate market give loans with serious guarantees. I don't really deal with this market. I deal with markets with extraordinary locations and special properties, be it commercial, residential, industrial or investment.”
explained Eduard Uzunov for “Adevărul”.

He mentions the fluctuations caused by the political context in the first part of the year, which temporarily curbed the momentum of investors, but notes a strong recovery in recent months:

“The real estate market at the beginning of the year suffered very badly, due to some political rumors and some ominous political statements. After the election it started to recover and now people are thinking seriously about investing, but in special locations and in absolutely gorgeous products.”

The luxury real estate expert draws an interesting parallel between the exclusive car market and that of top properties, suggesting that the intrinsic value of an asset takes precedence over the price tag.

“These have always been the gold that you see has grown very strongly. Real estate has grown very strongly and then it is obvious, because, how can I say, the value in the form of a property remains obvious, even if the values that are given by amounts, amounts… Well, wait a minute, let's make an analogy. It ended up that a Rolls-Royce cost forty-two million euros, and real estate, if I have offers, I have offers of thirty, fifty million euros, these are only is just a number”, Uzunov specified.

Despite global financial instability, confidence in well-positioned properties remains unwavering.

“In the fall I had that impression too. Now, at the end of the year, we have a revival. The quality products are selling, and I am convinced that this will not happen (i.e. a downturn). Inflation is too high, instability continues in terms of international financial markets, and real estate investment in location, location, location products is solid gold investment.”
consider this one.

The reduction of interest rates by the NBR will accelerate the real estate market

Another key element for the next period is the monetary policy of the National Bank. Eduard Uzunov anticipates beneficial effects with the relaxation of credit conditions.

“Cutting interest rates in the near term will have a positive impact, and will continue to have a positive impact, because it will create stronger stability,” he concluded.