Valuation study: Romanian housing prices to continue drop, more foreclosures expected

Romanian housing prices will continue to decrease slightly in the first half of the year and will stabilize in the second half, according to evaluation firm Darian. Company representatives said they expect foreclosures to continue this year, which, coupled with more relaxed financing conditions, should ease real estate transactions this year. The liquidation of real estate guarantees on non-performing loans, which will allow investment funds to buy these loans in bulk, will be another phenomenon noted in the market this year, Darian added. "An important moment this year will be the connection between non-performing loan sales and the restart of lending. Those who buy foreclosed property need financing," said Adrian Crivii, Darian president. He explained that, so far, banks avoided selling non-performing portfolios and sought every way possible to prevent foreclosures. In his opinion, the real estate market will recover when supply starts to dwindle, since the number of residential projects launched over the past two years was very low. Darian conducted a study of the real estate market in 27 Romanian cities, which revealed an average 10% decrease in housing prices in 2010 compared to 2009. As such, the average price of a used apartment reaches some EUR 774 per square meter, while new flats cost EUR 846 per square meter. Mediafax