Real Estate Prices will Continue to Grow, Says IMF

Real Estate Prices will Continue to Grow, Says IMF

Foreign capital's entry rate will not stagnate in Romania, so the real-estate prices in Romania will continue to grow, Juha Kahkonen, senior advisor within IMF's Europe Department, cited by Nine o' Clock. 

'When capital enters a country, it is natural for the resources to focus on goods, that is why the prices grow. In some states, this process is in an advanced stage and the real-estate prices have started to drop, for example in the Baltic states' Kahkonen said.

He added that the Romanian authorities should carefully manage the situation so that the process of trend reversal, in the sense of a drop in prices, would not create turbulence. ‘What is certain is that what goes up must come down’ Kahkonen added.

As a matter of fact, the Romanian National Bank has underlined several times that a part of foreign investments are directed in the real-estate market where the large demand for housing allows for significant growth in prices.

In recent years, the prices of houses in the urban areas have registered yearly hikes of 50 and 100 per cent. Real-estate analysts claim that only in the first quarter of this year, after Romania joined the European Union, the prices of apartments in Bucharest have grown by 20 to 25 per cent.

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