RO developer Nordis estimates Romanian properties are 30% undervalued

Based on a research carried out by Social Monitor, at its own request, Romanian real estate developer Nordis Groups concludes that the prices of the properties in Romania are some 30% undervalued - or, in other words, the prices should increase by some 43% to reach a fair level in line with the fundamentals.

It’s a striking finding that may look biased - but it reminds of a similar statement of BMW Romania manager Josef Reiter who stressed in an interview for Profit.ro that the Romanian customers are more affluent compared to his company’s West European customers.

The prices per square metre in Europe are much higher, Nordis Group explains - implying that the convergence should gradually lift the local prices in line with those seen in other European regions. Again, a striking conclusion - that should be filtered for the premium property customers only.

In 2022, the dynamic trend of the real estate market, which has prevailed during the previous year, will continue “taking into account the inflation rate forecast for this year, but also the increase in the level of bank deposits,” Nordis Group reasoned.

Indeed, faced with negative deposit interest rates, the owners of large bank deposits (a very narrow category of the households, though) may seek to escape the trap and buy (premium) properties.

“All these elements will keep the demand high, both for personal use and for investment purchases,” the real estate developer concluded.

The rising interest rates and the budgets of the average households being squeezed by the utility bills are likely to result in softer demand on average, though.

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