Romania Bucharest real estate madness

Many of you may think or may have been told that Romania and in particular Bucharest is one of the last places left in Europe for a profitable real estate investment.

I pretty much doubt that, and I’d like to contradict all the experts who sustain that.

Let me tell you, that almost all the statistics are completely wrong and based on false information released in order to attract foreign real estate investors.

How is that possible? Well, let me tell you the behind closed doors’ story.

It is well known that Romania is still placed among one of the most corrupted countries in Europe, with the corruption reaching the high levels of the government. The government fractions’ fight over influence and power has kept at bay the foreign investors in 2007.

However, as far as the corrupted people in Romania are concerned, they don’t even need foreign investment, because their business is conducted in Romania and involves the Romanian people.

Those blood suckers are backed up in general by government officials in high positions splitting the profit made from businesses which involve abuse of power, fraud use of influence and theft, undermining the whole national economy and implicitly lowering the citizen’s standard of life. The irony is that after “The Revolution” the ex-communists became overnight the most prosperous business men in Romania.

They’ve only changed their name from communist to business man, and like before they own this country we the rest are just living in it.

So, to get back to the Bucharest real estate prices and Romania in general, you have to know that the prices are set by this kind of people all depending of their own interest.

Using mass media they lower or rise the prices at their own will, the same as they manipulated people into believing that the RON(Romanian currency) will remain forever strong against the Euro, which it didn’t happened. During the promotion campaign of the national currency, most of the loans were in Euros.

The same thing it happens with the National Lottery; they are manipulating the winning numbers.

Last time it took 22 weeks for someone to guess the winning numbers. That was a record.

The winner got 12, 45 million Euros from which tax is deducted, so the winner gets around 9 million Euros. It is common in Romania not to have a lottery winner for many weeks. Last record was in august 2007 with 21 weeks without a winner.Anyway, in Bucharest the real estate prices raised so high that it is almost impossible for a medium income citizen to buy a 2 room flat, and I’m not talking about the central area.A 40-50 square metres flat, 30 to 40 years old com block (built in the communist era) costs now around 100,000 Euros and over. That is over 2000 Euros per square meter for an ugly shoe box.So whatever you do, do not buy that kind of property.The new residential developments are sometimes cheaper.  There are still new buildings in Bucharest where you can buy from 1600-2000 Euros per square meter.I know it sound weird and you will wonder why.These are the prices, period.When an easy making money guy affords to pay double the price of a flat because the owner is poor and crazy and wants to get rich overnight, than his neighbour will ask the same price when selling his flat and so on. Via word of mouth advertising the prices are increasing over night and the real estate market comes to a stand. Owners are prepared to wait 1 year if necessary to get the price they asked because it is once in a life time opportunity. It is enough for a real estate expert to appear on the national television or on any other channel, saying that he estimates the real estate prices will go up in Bucharest; within the next weeks the real estate prices do go up.Please keep in mind, Romania is a country where the minimum income is around 150 Euros per month.None the less, a real estate business is a real estate business even in Romania, and the high prices, at least for the new residential buildings are here to stay.