I am Slavic Pîrlea, and I represent Imoland Consulting real estate agency starting with the end of 2019. I have begun working with the clients and doing all the things specific to this domain almost in the same period that Covid and its effects have started. The area I represent is part of District 1, with a wide range of buildings, such as interwar and modern houses / villas, blocks of flats built during the communist period and new ones.
Sales Statistics
January 2020 starts with a similar number of transactions in Bucharest compared to last year. In February 2020, there was a higher number of transactions (by over 35%) compared to 2019, a consistent increase. The big difference comes in May 2020, which is the only month that registers a considerable decrease compared to 2019 (May 2019 exceeding by 30% the number of sales, according to ANCPI – National Agency for Cadastre and Real Estate Advertising). From June until now, the market has had a steady increase in sales compared to 2019. The main reason for the decline in May is the quarantine of the population, but also the increase in advances for mortgages (most accessed) from 15% to 35%. Banks have become more selective in granting real estate loans. We cannot speak of a major price decrease, 2020 being a good year in terms of transactions, despite the fact that the global economy has declined significantly. We can see that the share price has dropped by over 50% in most large companies that control oil, hospitality, transportation, and production (Investing.com).
Demand and supply
We are going upstream in terms of real estate, but we do not know what the future holds. The higher demand makes the offer maintain its price. Of course, the negotiation did not change due to the fact that we are in an unstable economic situation. People try to negotiate as they did before, and they are not specifically affected by this economical change.
The 2 and 3 room apartments create the highest flow of demands, but the supply is also higher on these types of apartments. The lands without constructions, but also those with constructions, register an increase compared to last year. The desire to avoid congestion and lack of space in the apartments, generates a higher demand compared to individual units. Starting this year, the home office is a necessary one, and will most likely be implemented in real estate projects in the near future.
Rent
Most of the large companies have given up renting office space, optimizing and reducing costs by choosing to work remotely. The office sector is and will be affected in the next period. The hotel industry has suffered the most. The lack of sustainability for a long period, but also the high maintenance costs have made the owners of hotels / boarding houses to sell the buildings for residential purposes.
The entire rental sector recorded large losses, and as a result, the rents are converted into sales. This conversion process is an important factor that helps to increase the sale offer, and the positive part is that it does not exceed the current demand.
Following what has been said, the conclusion is that the field of real estate sales did not suffer during all this period compared to the previous year, on the contrary, it even registered an increase. The good part of real estate during this whole pandemic period comes with the change of the demand, and not with its extinction.
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