Eurohypo, the first bank that arrived on the Romanian market to exclusively focus on the release of solid financing for the real estate sector, plans to grant loans worth 200m euros in the first year in business in Romania.
“Eurohypo had been testing the market for 2-3 years, but last year we decided to open an office here and in November we registered it.

This is not our first contact with the Romanian market since Eurohypo has already sealed here, directly from Germany, two deals worth 40m euros,” Fulga Dinu, Eurohypo manager for Romania and Bulgaria.

This medieval Saxon city has become one of Europe’s official culture capitals, drawing attention to centuries-old buildings that were once ordered demolished during Romania’s communist period.

Sibiu, in the region of Transylvania, set off fireworks and held concerts and light shows to celebrate its designation, timed to coincide with Romania’s accession to the European Union on New Year’s Day.

“Sibiu shows clearly this year an important aspect of what Romania brings to the EU: its cultural contribution,” Prime Minister Calin Popescu Tariceanu said at inauguration of a newly built library.

Sibiu, also known by its German name of Hermannstadt, joined Luxembourg as an official European city of culture for 2007.

The European Parliament each year names the countries that hosts the European Capitals of Culture.
Authorities and private foundations have repaired Sibiu’s fortified wall, two towers and three fortresses, and renovated dozens of old buildings in the center.

Low-cost air companies in Romania doubled their passenger number in 2006, the national Rompres news agency reported on Monday.

MyAir Romania representative Antonio Iervolino thinks that low- cost flights are likely going to replace bus transports because a travel by bus may take a three-day journey instead a 2-3 hour flight at a much smaller price.

There are four low-cost companies on the Romanian market, Blue Air, Wizz Air, MyAir and Sky Europe, whereas other low-cost air companies such as Easy Jet, Ryan Air, Air Berlin, German Wings announced their entrance on the market in the upcoming years.

A return flight with a low-cost company, with all taxes included, can even cost below 150 euros, whereas a return journey by bus seldom costs below 200 euros.

Spanish company IUE Leader Imobiliare purchased a 4.3-hectare plot of land on Lujerului Street in Bucharest, previously owned by Electrotechnica, for which it paid 30.6 million euros.
The Spanish will use the land, located near Plaza Romania shopping centre, to develop a residential complex comprising 1,200 - 1,500 apartments, which will entail an investment amounting to some 70-75 million euros.

The plot was purchased from Winmarkt Alfa firm, whose partners are the companies Winmarkt SA, Bucuresti Alfa Center and TEC Administrare Afaceri.

Winmarkt SA manages 17 shopping centres, with a rentable area of over 115,000 square metres, in 14 cities.

The European Union gained two more member states on 01 January 2007 with the accession of Romania and Bulgaria, making a historic New Year for the two nations.

Huge celebrations were held in both countries to usher in a new chapter in their history, seventeen years after the fall of communism.

The European Union now has 27 member states and over half a billion people, stretching from the Atlantic Ocean to the Black Sea.

Romania and Bulgaria applied for EU membership in 1995 and began formal accession talks in February 2000.
“It was hard, but we arrived at the end of the road. It is the road of our future. It is the road of our joy,” said Romania’s President Traian Basescu.

“But let’s make it clear, our future success as a nation depends not on European funds and resources, but on our own work,” he added.
Foreign ministers of Germany, Denmark, Austria and Hungary, who were in Bucharest, wished Romanian citizens a happy new year.

In the United Kingdom, Foreign Secretary Margaret Beckett said that Britain stands to benefit from the accession of Romania and Bulgaria.

Less than one week after joining the European Union, Romania announced plans Wednesday to join the euro by 2014. Analysts believe that Romania’s ambitions to sign up to the eurozone in the next 7 years could be realistic with robust economic growth helping to underpin Bucharest’s efforts at adhering to tough budget discipline.

Romania’s Brasov county council is seeking a ten-year loan from an Austrian bank to buy back a medieval Transylvanian fortress, known as “Dracula’s Castle”, from the descendants of the country’s former royal family of Habsburg.
The current owners — Dominic von Habsburg, an industrial designer who lives in New York, and his sisters Elisabeth Sandhofer and Maria-Magdalena Holzhausen, who both reside in Austria — have demanded 60m euros for the real estate, officially called Bran Castle.
“We want to get involved in getting back the castle and running it because it would be a very good opportunity to further develop tourism,” the president of the Brasov County Council, Aristotel Cancescu, said on Monday (January 8th). “The costs are minor compared to what we might obtain. In order to buy the castle, the County Council will pay in the first two years 2.7m euros, and the rest up to 60m euros will be paid through a loan.”

The price for luxury apartments in Bucharest is still one of the lowest in Europe.

The average price is 2,400 euros per square meter in Bucharest, compared to the absolute “champion of expensive”: Monaco’s 24,000 euros per square meter, a study by Global Property Guide indicates.

The second most expensive place is London, where a square meter in downtown is 10,000 UK pounds - some 15,000 euros.

The government plans to open 200 km of motorway per year during 2008-2018 to upgrade Romania’s transportation system, Romania’s Minister of Transports, Construction and Tourism Radu Berceanu said.

Currently, funding for Romania’s motorways construction has primarily come from state budget or from European funds.

For the new motorways, “we also need to use funds coming from other sources, such as commercial credits and a public-private partnership system,” Berceanu said.

The government is also considering leasing as an option to raise funds, which will allow a high level of technical maintenance of the motorway, and the lease period may be 20-25 years, Berceanu said.

The property market in some areas of Romania has been growing at a bullish rate of 25% to 30% p.a. for the last 3 years, fuelled by speculators waiting for healthy capital returns.

The best place to invest in Europe

Romania has proven to be a safe place with high capital appreciation especially in the Bucharest area. Romania is currently undergoing major infrastructural developments which will see further capital growth all over the country. “The growth trend is expected to carry on for the next 5 years” says Damien Thiery from Romanian Properties Ltd, who adds: “Romania joining the EU January 1st 2007 along with the development of tourism on the Black Sea coast and in Transylvania, will prove that Romania in the years to come will have one of the fastest growing economies in Europe”. The “Super Highway” between Constanta and Budapest which will go through Bucharest and Brasov will be a critical element in securing Brasov’s role in Eastern Europe on a long-term basis. Not to mention that low cost airlines will soon fly to several cities in Romania lead by Wizz Air who has announced scheduled flights from London Luton to Bucharest in January 2007. British citizens are increasingly purchasing properties in Romania either as investments or holiday homes.

Where to buy in Romania

The scenery in Romania is stunning and unspoilt, the cost of skiing is very low compared to the rest of Europe, the coast is superb and the Romanians are very welcoming. As a pure investment or even as a holiday home or apartment, Brasov in Transylvania offers one of the highest potential returns as its location near the ski resorts, its infrastructural developments (new airport to be completed in 2008, “Super Highway”), and its lovely traditional town center makes Brasov one of the most sought after locations in Romania. Romanian Properties Ltd currently offers the opportunity to purchase off-plan apartments in Brasov built to Western-European standards at 900 Euro/sqm. The coast and its sandy beaches will see a high development of tourism from Western Europeans who are only starting discovering the beauties of Romania. The investments in Bucharest (shopping centers, off-plan, resales) started a few years ago, and as such the prices have already gone up in and around Bucharest. The potential, though still substantial, needs to be assessed very carefully. Prices are very cheap in rural areas but you need to be prepared to spend some time and to have renovation expenditures for your property to achieve British standards.

Steps to buying in Romania

Doing your research as well as finding a well-established agent based both in Romania and in the UK are key when purchasing in Romania. No capital gain tax when selling your property 3 years after the purchase of your property makes your investment in Romania worth while. You will need to raise the cash as mortgages are currently not available yet to foreigners. Should you wish to buy a villa or a plot of land, you will need to set up a company which is a very simple process - your estate agent should assist you with it. Purchasing a new or off-plan apartment can be carried out in your name without requiring a company formation.

What’s Next

Contact Romanian Properties Ltd (0870 224 2142) should you want any advise with regards to your property purchase in Romania.