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Global Property Guide
Bucharest Ilfov County
Romanian Land Sales
Investors showed increased interest in buying land in Romania's Bucharest-Ilfov County region in 2011 according to new data from IMOPEDIA.ro, which recorded increasing visitors to its website and increased interest in buying land in built up areas last year compared to 2010.
According to the website's index of drawn interest or attraction to the place, interest increased by 49% in October and November, and by 64% in December, compared to the same period of 2010. In November, 61.000 visitors searched for information about this type of landholdings the report said.
"The interest for land follows a positive trend, quite stable, which is not influenced by external factors, such as the First House governmental buying program," said Razvan Muntean, general manager IMOPEDIA.ro.
The firm puts the increase in interest down to falling prices in the region and across Romania over the last 18-24 months, but this may not be the only reason.
Romania's property market presents a good anomaly for property investors, in that property prices are falling while the economy is growing.
According to the latest data available from Eurostat the Romanian grew 4.4% in the year ending Q3 2011. This makes it one of the fastest growing economies in Europe. The likes of Estonia and Lithuania saw faster growth at 7.9% and 7.3% respectively during the same period, but these had strong year on year figures in the previous 9 months as well, and in fact the timeline indicated growth slowing. But in Romania in Q4 2010 the economy was flat compared to Q4 2009, in Q1 it was up 1.3% compared to Q1 2010 and in Q2 it was up 1.9% before shooting up to 4.4% in the final quarter.
During the same time property prices continued to plummet, although no official data is available we have a consensus of real estate agents opinions on this.
Investors also find a moderate taxation regime in Romania, which is as follows (Source: Global Property Guide).
Rental Income: Net rental income earned by non-residents is taxed at a flat rate of 16%. Capital Gains: No tax is levied on the capital gains realized by individuals from selling real property; however transfer tax is levied on the transfer of immovable property in Romania. Inheritance: Inheritance tax is imposed at regressive rates from 2% to 0.5% depending on the value of the inheritance. Residents: Residents are taxed on their worldwide income. Residents may deduct personal allowances and allowances for dependents.
Finally, and arguably the biggest draw to investors at the moment is the fact that Romania is still outside the euro. According to a recent survey by DTZ more investors and businesses now believe that the Euro will break up than those who believe a resolution will be found to the debt problems. This is bad for Estonia which just joined the beleaguered single currency union, but good news for countries outside it like Romania, which are seeing increased investment as a result.
Whatever the reason, investors are buying more land in Romania, and land usually means development. If all the land being bought now is developed in the next couple of years, we could be looking at Romania as one of the first players in the next overseas property investment up cycle.
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*This page is provided for information purposes only and should not be construed as offering advice. IPIN is not licensed to give financial advice and all information provided by IPIN regarding real estate should never be treated as specific advice or regulations. This is standard practice with property investment companies as the purchase of property as an investment is not regulated by the UK or other Financial Services Authorities.