Residential Division

Deliveries of new homes decrease in Bucharest versus Ilfov

Deliveries of new homes decrease in Bucharest versus Ilfov 899 600 BUCHAREST REAL ESTATE CLUB

17.10.2023

The administrative deadlock and the uncertainty of the urban climate deepen the losses for Bucharest’s economy on multiple levels: the decrease in the number of homes delivered in Bucharest, versus Ilfov, as well as the taxes collected by the authorities.

The data from the National Institute of Statistics show a decrease in the share of the number of homes delivered in Bucharest to the detriment of those delivered in Ilfov. Thus, from 66.5% in 2020, it decreased consecutively to 60.60% in 2021, reaching 57.40% in 2022, while the share of Ilfov County increased.

FINALIZED RESIDENTIAL UNITS BUCHAREST & ILFOV, 2020-2022. SOURCE: INS

YEARNUMBER OF NEWLY DELIVERED RESI UNITSBUCHARESTILFOV
202020,78366.50%33.50%
202122,01060.60%39.40%
202221,32857.40%42.60%

“The urban gridlock has clear effects regarding the accessibility of new homes in Bucharest. The share of deliveries from neighboring areas increases, this fact having a direct impact on the increase in traffic values and pollution in the Capital, where people come to work, to bring their children to school or for social activities”, says Despina Ponomarenco, President of BREC.

According to the financial statements submitted to ANAF (by companies active in the construction and real estate industry) as well as the INS statistics consulted by BREC analysts, Bucharest’s contribution to the national GDP decreased from 37% in 2019 to 34.6% in 2021 and up to 29.8% in 2022, a level similar to that of 2010, at the height of the financial crisis. The estimated loss for tax revenues is 3.45 billion Euros for the period 2022-2026, while the loss of added value in the economy for the same period is 10.4 billion Euros.

“In the context of the increasing strategic importance of the CEE area, Bucharest is losing major investments due to the uncertainty and lack of predictability in terms of urban regulation. The capital of Romania is in competition with other capitals in the CEE area, not with secondary cities in the country, so the losses are for the Romanian economy”, explains Despina Ponomarenco, President of BREC.

The Bucharest Real Estate Club Association (BREC), which represents the entire real estate industry – large developers, construction companies, architecture, project management, consulting, or real estate law – remains open to dialogue with the authorities to identify the best solutions so that Bucharest to return to a normal framework.

The demand for new residential units is rebounding

The demand for new residential units is rebounding 936 516 BUCHAREST REAL ESTATE CLUB

29.09.2023

The demand for new apartments in Bucharest registered a 46% increase in the second quarter of the current year compared to the same period of the last year, while the supply has a minus of 26%, as shown by the immobiliare.ro analysis presented at Residential Conference – The Future of Quality Living organized by BUCHAREST REAL ESTATE CLUB (BREC) this week in Bucharest.

The data show increases in demand in every area of Bucharest, starting from 11% for the West area, up to 54% for the North area.

The offer is decreasing: -44% in the North, -31% in the East, -22% in the West and -16% in the Center. Only the southern area has an increase of 6% for the supply of new apartments. Prices register decreases of 2% in the West, 3% in the East, 4% in the Center and 9% in the South. The North is the only area where prices increased with 7%.

“At the level of the Bucharest market, demand has recovered from last year’s dramatic drop, from the second quarter. At that time the outlook was bleak: war on our border, galloping inflation, rising interest rates, rising prices. However, the market has shown maturity and resilience, and even if we have not yet exited the risk zone, we have reasons to look with some optimism at the next period. We hope that the impact of the new fiscal changes will not be likely to affect the course of the market, and if this is the case, then we will be able to see a beneficial 2024 for the residential market”, says Dan Niculae, Managing Director, Imobiliare.ro Finance.

In the context of the VAT increase from 5 to 9%, the elimination of facilities for the construction industry as well as the increase of the minimum wage for this field, the medium and long-term forecast is of an increase in housing prices.

“The data presented show a clear decrease in supply of 26% in Q2 2023 compared to Q2 2022 and 12% in Q2 2023 compared to Q1 2023. The difficulty of authorizing new projects, given the urban gridlock in Bucharest, will cause a sharp decrease in the supply of new homes and price pressure”, says Despina Ponomarenco, BREC President.

The new unit rental segment saw significant demand growth of 63% YOY and 17% compared to Q1 2023. Broken down by area, the increase in demand for new apartments for rent starts from 49% to 71% in Bucharest.

Urban congestion reduces the accessibility of Bucharest

Urban congestion reduces the accessibility of Bucharest 1200 600 BUCHAREST REAL ESTATE CLUB

27.09.2023

The lack of predictability currently manifested by the project to modify the fiscal measures affects not only the business environment, but also consumers and will generate major imbalances in the market, believe the representatives of the largest real estate companies, members of the Bucharest Real Estate Club organization (BREC). They participated yesterday in the debate Residential Conference – The Future of Quality Living, the main topics being the turbulence affecting the fields of construction and real estate in Romania.

Even if, fundamentally, the developers agree that the Government’s plan to increase taxes is reasonable, considering the fact that their level is lower in Romania than in other countries, they believe that such changes must be announced in time so that the environment businesses to adjust their investment plans accordingly.

Andrei Diaconescu, co-founder of One United Properties, spoke in this regard about transitional provisions that should have been adopted as part of the plan to modify the tax package. “I find the Government’s plan reasonable, even if I do not agree with the tax increase. When European money comes through PNRR or other mechanisms, I understand why tax facilities are removed for some categories such as builders, but there are private investors who do not benefit from European funds and who have large projects that develop for several years. In their case, it would have been reasonable to benefit from transitional provisions, which would give them time to adapt their plans”, said Andrei Diaconescu.

Tinu Sebeșanu, CEO of Impact Developer and Contractor, disapproves of the way the fiscal changes were debated and the short implementation time. “In Germany a tax increase of 1% was announced 3 years before. The German state recently announced incentives for residential developers. Romania’s budget has been bleeding for years and we are permanent blood donors. The impact of the new measures is not major, but it creates pro-cyclical measures and we would have liked more predictability”, said Tinu Sebeșanu.

The lack of predictability is the reason why Cordia, part of the Hungarian group Futureal, changed its plans regarding Romania. “Our plans could not be developed in Romania as we originally proposed. As an international investor, we had to move to other markets for the time being, where conditions are favorable and predictable. In Spain we have a project under development and we bought two other plots, the last transaction, worth 46 million euros, being among the largest in the Costa del Sol in 2023. This money could have come to Romania, a market in which we will remain and in which we will continue to develop residential projects”, said Mauricio Mesa, General Director, Cordia Romania and Spain. The company announced in 2019 a budget of 120 million euros for the development of projects and 40 million euros for the acquisition of land, currently having a portfolio that allows it to develop more than 2,000 apartments.

Also speaking about predictability, Laurențiu Afrasine, CEO of Akcent Development, referred to an official meeting of real estate developers last year with Prime Minister Nicolae Ciucă, who assured them that the Government had no intention of changing taxes. “There will certainly be an impact on many levels, especially the emotional one for the buyer, who will be faced with the new prices.” Afrasine said.

Developers continue to face the urban gridlock that is chronically manifested already in Bucharest and is beginning to make its effects felt in other large cities as well.

What are the solutions for unblocking Bucharest? Andrei Diaconescu claims that the first step is the unblocking of the Zonal Urban Plans (ZUP) by sector, the next is the adoption of the General Urban Plan (GUP). “GUP should have been ready much faster, it’s already been going on for several years. If you don’t have a GUP, you can’t develop anything on a plot of land of over 3,000 square meters.” said Diaconescu, and in the end everyone suffers. “We all bear the burden of traffic, the city is developing towards the periphery, but schools, theaters, workplaces are in Bucharest, so transit traffic is increasing, a situation that I don’t know if it is taken into account by the local authorities”, Diaconescu also said.

The consequence of the urban uncertainty is the decrease in the accessibility of Bucharest, as the demand for apartments and new office spaces will recover, but the supply will decrease.

WHO ARE THE MOST INFLUENTIAL WOMEN IN REAL ESTATE IN ROMANIA, A BREC POWERLIST

WHO ARE THE MOST INFLUENTIAL WOMEN IN REAL ESTATE IN ROMANIA, A BREC POWERLIST 740 601 BUCHAREST REAL ESTATE CLUB

Women in Real Estate: Successful Entrepreneurs, Thought Leaders, Inspirational Managers

Romania is a balanced market as regards the presence of women in entrepreneurship, management & top management roles of real estate companies. Developed during the entire month of March 2021, at its 2nd edition this year, WOMEN IN REAL ESTATE campaign by BUCHAREST REAL ESTATE CLUB acknowledged the role of women in managing and developing significant real estate businesses in Romania.

BREC LIST OF WOMEN IN TOP MANAGEMENT ROLES:

  • Fulga Dinu, Country Manager Operations, Immofinanz
  • Ana Dumitrache, CTP’s Country Head for Romania
  • Daniela Badulescu, Country Manager, S IMMO Romania
  • Anca Raducan, Country Manager, Lion’s Head Investments
  • Ema Iftimie, Head of Leasing, Globalworth
  • Beatrice Dumitrascu, CEO, Residential Division, One United Properties
  • Alexandra Popa, CFO, Element Group
  • Antoanela Comsa, President of Gran Via Real Estate Romania
  • Aurelia Luca, Executive Vice President Operations Romania & Hungary
  • Sinziana Pardhan, Managing Director Romania, P3
  • Elisabeta Bosneag, Head of Global Real Estate, UiPath

BREC LIST OF WOMEN REAL ESTATE ENTREPRENEURS AND PRIVATE INVESTORS:

  • Cristina Capitanu & Elena Oancea, Founders of Lemon Interior Design
  • Sheila Ionescu, CEO, The One
  • Alina Marulis, Founder, Oxygen Home
  • Catalina Mazerschi, Owner, Glamour Design | Diseno

BREC LIST OF WOMEN ADVISORS IN REAL ESTATE:

  • Roxana Dudau, Associate Partner & Head of Real Estate, Noerr
  • Monica Vasile, Director, Office Agency, Cushman & Wakefield Echinox
  • Alina Nica, Partner, Ionescu-Sava law firm
  • Ana Maria Nemtanu, Head of Marketing & Sales, Gran Via Real Estate

“In an atypical year as it was the case of 2020, the women`s performance in real estate management roles in Romania are the more notable. They adjusted their companies` actions and business plans according to the new reality, they negotiated, re-negotiated and signed large sales or rent transactions of the real estate assets and they even decided the start of new real estate investments, under full pandemic circumstances. As compared to the Western European countries, Romania is a particular market, with women managers being very present and visible in the real estate sector, being remunerated as such,” states Despina Ponomarenco, President of BUCHAREST REAL ESTATE CLUB.

BREC also looked in depth at the industry`s income levels. Women in top management roles (CEO, COO, CFO) may exceed net annual incomes of EUR 100.000 EUR, plus 3-5% ad-ons from the annual profit of the projects they manage („shared profits” participation). The middle management roles (Marketing Director, Commercial Director, Legal Manager) are remunerated with incomes that may exceed 50.000 EUR per year, with performance – related bonuses. For example, commercial directors in the residential segment can add to their salaries a plus of 1% of the total sales volume they coordinate. In the brokerage sector, senior department managers are remunerated with 36.000 – 55.000 EUR annually, plus commissions of 8-25% of the incomes they generate for the company.  

(14.04.2021)