The representatives of the magazinuldecase.ro website, which is currently listing almost 3,000 homes, say the decline is the outcome of a shrinking solvent demand for homes in Bucharest, while the supply of both new homes and old homes is rising, considering some of the speculative investors put their flats up for sale at the beginning of this year.
"This used to be a sellers' market until recently, where prices would not be negotiated because no ad would stay up for more than two or three days without the home being sold. As a number of investors feel a degree of panic, we may now be talking about oversupply, considering the decline in the number of solvent buyers and the increase in the supply of homes," stated Matei Malos, the general manager of the company that owns the website. The supply of old flats increased by almost 50% in the first quarter of this year, after the number of homes put up for sale totalled almost 15,000.
However, the average asking price for old flats in Bucharest remains at 134,000 euros, the same as at the beginning of the year.
The price decline mostly affects the districts on the outskirts of the city, whereas prices in the central and prime central locations remain unchanged, given the constant supply.
"Those under pressure to sell generally agree to cut the price by 10 or 15% even in central areas, while those who are in no rush continue to ask for the same price. Last year was a very good year, but early this year we noticed a 20-30% decline in the number of deals," states Daniel Raeceanu, the general manager of real estate agency Rasig Group, which employs 36 real estate brokers.
The prices of old homes in Bucharest went up by almost 50% last year and the depreciation of the RON against the European currency, joined by the increase in interest rates, made it harder for buyers who took out loans to repay their instalments. "While the supply was low and demand was constant, owners drove prices up to a maximum that peaked at the end of last year. Seeing that the interest rate is no longer what it used to be, investors have panicked and lowered prices by 5-10% during the last two months, especially in low-cost districts," adds Claudiu Hategan, branch manager of the Opera Center branch of Coldwell Banker Affiliates of Romania, which brokers deals with homes in sectors 4,5, and 6 of the capital city (Berceni, Drumul Taberei, Militari).
According to the real estate index put together by ZF based on the offers on anuntul.ro website, the average asking price for old three-room flats in Bucharest was 2,070 euros per square metre at the beginning of the year, an increase of 2% compared with the beginning of the year.
As far as new flats are concerned, 6,000 units are expected to be delivered this year, which could be a record on Bucharest's residential market, considering the number of flats completed over the last four years did not exceed 3,000 units a year.