Bucharest Property
Bucharest property
represents one of the strongest investments you can make in Central, Southern and Eastern Europe.
Bucharest is booming, property prices are soaring; the question is not whether to invest, not when to invest, but where to invest.
And the answer probably is "anywhere" in Bucharest; wherever you invest in the capital should bring you substantial returns.
But what can you expect from Bucharest if you paid it a visit? Quite simply, a city bustling with activity, wall to wall traffic and a skyline made of apartment buildings under construction and cranes. - all testament to the ongoing, exponential growth of the city.
BUCHAREST KEY FACTS
Bucharest’s economy is centred on industry and services. The city serves as the headquarters for approximately 186,000 companies.
59% of the working population works in services, 31% in the industrial sector, the remaining 10% in other fields.
Bucharest is the most economically developed and industrialised city in Romania, producing 21% of the country’s GDP.
In 2005 unemployment in Bucharest was 2.7%. This is much lower now; probably zero unemployment – the number of vacancies far outstripping the number of unemployed.
The city is served by two airports.
Bucharest is a major intersection of Romania’s national road network. Romania’s two expressways currently in operation, the A1 and the A2 both start from Bucharest.
The educational level in Bucharest is higher than the national average, with 26% of the city’s population having a college degree.
The University of Bucharest is the city’s largest and best known higher education institution, and, opening in 1694, it was Romania’s first university.
In addition to this, Bucharest is home to 20 other higher education institutes, and the city has a university student population of 100,000.
BUCHAREST PROPERTY SHORTFALL
There is rising demand for residential and rental properties from the new emerging middle class in Bucharest which cannot be met. Over the course of the last few years, growing incomes and the increasing availability of good mortgage products has driven up the prices of older apartments situated in pre-1990s blocks of flats three-fold.
There is currently a massive housing deficit of 300,000 homes in Bucharest, but there will be just 1,000 new-build apartments completed in the near future, with a further 15,000 unlikely to reach completion before the end of 2010.
BUCHAREST INVESTMENT
In addition to the lack of supply of Bucharest property , the city itself has seen a huge amount of FDI from blue chip names across Europe and beyond. Companies setting up or expanding operations in Bucharest include:
- Microsoft
- Vodaphone
- Siemens
- Carrefour
In fact, this is what Bill Gates said when asked "Why Bucharest?" at the inauguration of Microsoft's Global Technology Support Centre:
"Great geographic location, great engineers and great foreign language speakers."
As the capital of the country, Bucharest is a natural draw for foreign companies to set up new European operations. Lower costs and incentives provided by the Romanian government are a big selling point too. Continuing FDI into the city will lead to higher wages, greater demand for new-build Bucharest property and, ultimately, higher property prices!
BUCHAREST TRANSPORT & INFRASTRUCTURE
Adding to the growing Bucharest property prices and designed to alleviate the previously mentioned traffic problems in the city, there is a significant amount of money being put into improving Bucharest's infrastructure.
Some EUR 12.8 billion is being invested in Romania's motorway network - essentially giving the country its first national motorway network and, crucially, linking all its major cities to one another and to the rest of Europe. Completion is due in 2013, by which time the network will have bee extended from just 114km now to an incredible 2,319km.
Bucharest will benefit massively from this expansion as direct access into and out of the city will become both much quicker and more plentiful. At the same time, traffic in the city will be greatly improved by the construction of a Bucharest Northern bypass, part of the massive expansion.
Bucharest property offers a medium risk, maximum return opportunity for property investors looking for long term capital growth in an emerging market.