Uncertainty on the Romanian luxury residential real estate market is causing a shift in investment strategies – for both investors and developers

In the last 6 months, prices in the luxury apartment market have fallen 10% for older apartments and newer construction sales have stalled almost completely, which is a major turn-round. The last few years have witnessed price increases of as much as 30%.

Two major luxury residential developers, Sonae Sierra, and Energoconstructia, one of Romania’s largest construction companies, have abandoned projects before even breaking ground. At the beginning of the year, Energoconstructia announced they would begin construction of fifteen 4 to 11-story buildings, which would have equated to almost 3,000 new apartments and an investment of €100 million. This has now been abandoned and an attempt is being made to sell the land.

“We decided to abandon the project which we intended to build on land we own in the Berceni area, because the real estate market is confusing at the moment, and fluctuations are significant on this market. We are already negotiating with an investor to sell a piece of land of some seven hectares in the Progres area, and are asking €500 per square meter, without VAT,” according to a statement for Business Standard by Constantin Tabacaru, Energoconstrucia’s Technical Manager. If sold at this price, the company stands to make some €35 million from this transaction. More on Luxury Real Estate in Romania Faces Uncertain Future