PwC survey: real estate investors turn risk-averse despite moderate prices in Romania

Real estate investors are risk-averse when it comes to launching new major projects in Romania and evaluate the wider European context when making investment decisions, although the fundamental analysis shows that there is still room for asset prices to rise, at least in first-tier cities, says Francesca Postolache, Audit Services Partner and the leader of the real estate service team of PwC Romania, which conducted a survey on the national real estate market together the Urban Land Institute. While the asset prices have gradually recovered in recent years, they are still 30-40% below the levels recorded in 2008, she argued. The sentiment on the real estate market turned volatile after apartment sales plunged in August by 30% compared to the same month last year, after buoyant residential market in 2017. One cause of this might be the tighter lending regulations enforced by the central bank, effective January 2019. Postolache says investor prudence is also reflected in expectations of availability of equity and debt. Only 28% of over 800 real estate professionals questioned for the PwC report believe that the amounts available for refinancing and new investment will increase in 2019, compared to 50% who said this last year. However, the level of confidence last year was unusually high, and this year, apart from the retail space sub-sector, which is experiencing a more difficult situation, there are still few concerns about market liquidity, as demonstrated by the majority respondents (54%) who believe that the availability of capital will be at about the same level as in 2018. Romania’s real estate market to remain liquid after EUR 4 bln deals in past five years – study editor@romania-insider.com (photo source: Pixabay.com)