The popularity of Romania as a holiday destination is set to increase in the next few years, an airline has predicted.

Low-cost carrier Wizz Air said the country offered a range of attractions to visitors, potentially making it one of the most popular tourist destinations in Europe

Natasa Kazmer, the airline’s head of corporate communications and public affairs, commented: “It has a booming capital, picturesque countryside and the beautiful beaches of the Black Sea.”

She added that since budget carriers had made travel to Romania quick and affordable, it was now well-placed to become the new “must-see place of Europe”.

The country’s growing popularity with holidaymakers could also boost its appeal as an overseas property investment spot.

This week, Wizz Air announced the launch of a new service between the Romanian capital Bucharest and Liverpool John Lennon Airport.

According to the American Automobile Association, Romania experienced a 700 per cent increase in the number of US tourists this year.

A study conducted by Unicredit Group reveals that 11% of Romanians intend to buy a home during the following three years, well above the 6% average in the Central and Eastern Europe states.
Although the number of owned home in the South-Eastern states is higher than in the Central Europe, and financial possibilities are quite far lower, some 15% of the population here intends to purchase a home during the following 10 years.The fast increase of income, the easy access to credits and superior economic growth rates are the main causes generating a 24% annual growth rate for real estate credits, the analysts say.

Foreign tourists, mainly from the European Union, are showing an increasing interest in traveling to Romania, national media reported today.

The increased number of tourists who decide to head to Romania’s seaside and mountain resorts, according to the Evenimentul Zilei newspaper, comes after long years of avoiding the country.

According to data by the National Statistical Institute, an increase of 35 per cent in the number of foreign tourists can be observed. From the total number of tourists, 62.5 per cent come from the European Union, of which 35.9 are Hungarians, 22.1 are Bulgarians, 9.1 are Germans and 8.1 are Italians.

In the last month, according to the publication, 616,300 tourits have visited the country, which is a 5.7 per cent increased compared with May of 2007.

In Romania, the credits taken by the population were on the rise in Q1, reaching 18.1% of GDP, 1% more than in Dec. 2007.
Data from Romania’s Central Bank (BNR) say that in end March, the balance of the crediting to the population had reached 76.54 billion RON (or 20.5 billion euros).

Consumer credits amounted to 1.5 billion euros in Q1. They accounted for 14.3% of GDP this March, up 0.7% from the end of last year, read calculations made by Ziarul Financiar daily, based on data from the Central Bank and the National Institute of Statistics.

Mortgage and real estate crediting accounts for only 21% of the credits to the population, consumer credits represent the highest percentage. The daily writes that the Central Bank’s statistics offer a distorted image, because mortgage credits are considered consumer credits.

Credits taken by the population are much below the average in the euro area, where they accounted for 55% of total crediting in end 2006.

Comparisons with mature markets show a very high growth potential for retail crediting, for mortgage crediting firstly. Most bankers connect their development plans with crediting with real guarantees, which has high growth potential, they believe.

The Swiss Golf & Leisure Development company, a joint venture established by five persons from Switzerland and Romania, is investing in a real estate project with an estimated value of 50 million euros, informs daily Business Standard on June 23.

The project includes an 18-hole golf course, a driving range, and 350 homes in the western Dragomiresti Vale area, near Bucharest. Company representatives said the project would also include a hotel with a minimum of four stars. The complex will be completed in 2010.

Prince Dimitrie Sturdza, promoter of the project, said the total investment in the golf course amounted to 5.6 million euros. Swiss Golf & Leisure Development was established in 2006, and the majority share package is owned by Radu Chiriac, a Romanian architect living in Switzerland.

This is the second real estate project with an 18-hole golf course, the first being that of the Silver Mountain, developed by INR Management in the central Romanian resort of Poiana Brasov.

The improving economic situation and EU accession will drive the Romanian construction sector into record figures in the next 2-3 years. Good performance will be achieved in all construction sectors, civil engineering, non-residential and residential construction, but several limitations still threaten these prospects.

Romanian construction sector growth is much stronger than in the previous year, reaching €15bn in 2007. It has shot up by 33.6% and is expected to maintain a high growth rate in the coming years, announced market research company PMR in one of its most recent reports “The Construction sector in Romania 2008. Development forecasts for 2008-2010.” As shown in the report, the triggers for growth in the construction sector are the positive economic performance and access to EU funds – to be spent on infrastructure currently in poor condition.

Commercial property preparing to expand beyond the capital
After many years of being dominated by the capital of Romania, Bucharest, developers and investors have started to consider other locations for commercial property. The relative saturation of the market in Bucharest and rising land prices are making investment less effective than in other locations. This is mostly applicable to commercial buildings (shopping centres or other large format outlets like hypermarkets and DIY stores) and warehousing facilities or logistic centres. For the moment, locations like Cluj-Napoca, Timisoara or Constanta are being considered due to much lower land prices and superior purchasing power in the case of commercial space or their location advantages for modern industrial space (located closest to Western Europe or on the Black Sea shore).

At the moment, Bucharest is still the undisputed leader in office space, both in terms of existing stock and announced projects. A relatively limited number of announced projects are holding demand much higher than the supply; however, it is expected to reach a balance in 3-4 years. Meanwhile, developing cities are being sized up for office space buildings, of which Cluj-Napoca is considered noteworthy.

Residential construction driven by improving living standards
There is a housing shortage in Romania, estimated at around one million, according to PMR analysts. By 2010 around 50,000 dwellings will be completed each year. In 2007 the number of completions increased by over 20%.
Housing shortage holds the demand at a very high level. Due to the improving standard of living among the population, the housing loans market is expanding. More and more Romanians can afford to apply for mortgage loans. This situation has kept the developers busy but has also raised house prices greatly. Up to now most residential projects have been announced and carried out in Bucharest but they are becoming more and more visible in other cities.

There is still however, a series of factors that can negatively influence the construction market in Romania, most notably the lack of construction workers due to work emigration and the capacity of Romanian construction companies to take up large construction projects.

The net average salary in Romania rose by 23 percent in May compared to twelve months earlier, the National Forecast Commission says.

Wages now stand at an average of Lei 1,248 (€347).

Gross average incomes stood at Lei 1,704, compared to Lei 1,750 last year.

The net average income of Romanians grew by more than 15 percent in December 2007 compared to the previous year.

For 2009, the National Forecast Commission is expecting a net average salary of Lei 1,303, which will rise to 1,819 by 2013.

However Bulgarians and Romanians still have the lowest incomes in the European Union, according to leading international bankers, JP Morgan.

Carrefour opens a new unit today, in the “Vitantis” shopping centre in Vitan, with a 4 200-sq m area, the company announces in a news release.

The investment in Carrefour Vitantis amounted to approx. EUR 12 mln. The new unit will have 36 cash registers and a parking facility for 2 000 cars. Although smaller than the traditional 8 000 sq m units, in Carrefour Vitan customers will be able to find 100 per cent of the usual product range sold in such units. The non-food sector however will focus on basic products, including electronic and home appliance, garments, sports products, books, music, films, toys and office supplies.

Carrefour Vitan offered 300 new jobs, with Carrefour Romania employing over 8 000 people since its establishment, and over 1 000 more in Carrefour Express supermarkets. In 2008-2009 Carrefour will carry on its development strategy, and will open new hypermarkets in Oradea, Buzau, Sibiu, Deva, a second unit in Braila, Iasi and Constanta each, and a new one in Bucharest, in Berceni area. Carrefour is the leading hypermarket chain in Romania, with approx. EUR 866 mln in turnover in 2007, accounting for a 42.2 per cent increase since 2006. in 2008, Carrefour expects its turnover to be in excess of EUR 1 bn.