Investing in Eastern Europe
Romania on the Rise: Investing in Eastern Europe
By Kevin Stillmock
"Moscow aside, if you look at central and eastern Europe, Bucharest is probably the biggest and most interesting opportunity for property investors right now," says Edit Vesser, corporate director for CB Richard Ellis in Bucharest in an article recently published by the esteemed Irish Times.
In February 2005, I first alerted readers of Escape Artist to the incredible potential latent in the Eastern European country of Romania. Several readers who contacted me purchased land through a realtor that I advised them of in an area outside of the city limits of Bucharest at 40 Euro per square meter. That land today is now fetching an estimated 200 Euro per square meter.
I was cautioned by colleagues to refrain from quoting the above figures as they seem quite sensational. Indeed, they are representative of unique successes and do not represent the average gain to be expected on property held in the Bucharest area for less then one year. However, such gains are possible and it is not uncommon to hear of such success stories occurring from transactions made on the current market.
These exceptional cases serve as an indicator of the general trend of rapid growth in value of raw land in what is known as "the new suburbs of Bucharest."
The price of land has gone up by 60-70% over the past several months, due to the high level of demand on the market triggered by the high profitability of investing in land, a report by CB Richard Ellis (CBRE) shows.
In a previous article for Escape Artist (http://www.escapeartist.com/efam/72/Real_Estate_In_Romania.html), I indicated land as potentially the best investment for the average investor in Romania. It poses the least hassles and headaches and tends to generate the most profit-growth in the shortest time. The verified rate of growth of property values between the time that I made this suggestion to readers and the publication of this article, given further credibility to my speculations. I am not alone in my view; Razvan Camuescu of RHR, a Bucharest property services firm in his interview for the aforementioned recent Irish Times article further comments, "Outside Bucharest we have seen the price for some land double over the course of two months." He adds that investments in apartments in the center of the city no longer necessarily represent a part of a good investment strategy.