C&W Echinox: legislative changes may favor local developers in Bucharest

The volume of land transactions in Bucharest and the surrounding area reached EUR 194 million in 2020, a moderate 6.5% decrease compared to the previous year, according to the Bucharest Land Marketbeat report performed by the real estate consulting company Cushman & Wakefield Echinox.

The land market was negatively impacted by the two-month lockdown period, but also by the less active and more expectative approach from office or hotel developers, the report reads.

Meanwhile, Romanian residential developers and German retailers such as Kaufland and Lidl were the most active buyers.

The C&W report also refers to the impact of the legislative changes - namely the unexpected postponement of the decision to raise the limit of a preferential VAT for homes and the suspension of the PUZs (Zonal Urban Plannings) for the city’s five districts in which these urban regulations were still valid. This measure could favor the local developers, C&W Echinox specialists estimate, arguing that they (local developers) are more flexible and better anchored in the Romanian legislative and urban context.

The market could gain a new positive momentum if the Government reconsiders its decision to postpone applying the reduced VAT rate to new apartments with prices up to EUR 140,000, the report also mentions.

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