Over 20,000 residential units are in different stages in construction in Bucharest and the surrounding areas, this being an absolute record for the history of the Romanian residential market post Revolution, according to the ”Residential 2019 Market Genome” report issued by SVN Romania real estate consultant.
Of these, about 14,000 units could be delivered this year, thus setting a new record, after which 11,272 houses were delivered in 2018 according to the National Institute of Statistics data – this being the most prolific year, 18% up compared to 2017.
”The age ’Build and you will sell’ is over. Although we do not see a major crises in the near future, in the absence of a macroeconomic factor with a strong negative impact, developers will not register the same rapid pace of sales, especially during construction phases. The solidity of the business plans will be decisive; the competition is more intense and we can already see a oversupply in some areas”, stated Andrei Sarbu, CEO SVN Romania.
The dwellings that target the middle class will hold for the first time the majority share in the new offer that will be completed in Bucharest and its surrounding areas, after decades in which the mass market dominated the market, SVN Romania’s data show.
Thus, 50.5% of the new offer is represented by the middle market segment. This homes usually have a good location, near business centres and in areas with an excellent general infrastructure, and have bigger surfaces compared with the units delivered prior to 1990. The development of the local economy could also be seen in the increase of the middle market’s share, which increased more than four times since the recovery of the local residential market.
The units from the mass market segment will hold this year a 48% share of the new offer. This dwellings are located in the big neighbourhoods our at the outskirts of the city and usually have similar or even smaller surfaces compared to the units delivered prior to 1990.
”The development of the middle class is of the most positive factors for an economy and the middle market segment will also hold the majority in 2020. We witnessed in the last years the development from scratch of entire areas and the residential segment is quickly following the office and commercial segments”, added Andrei Sarbu.
SVN’s data show that new areas in Bucharest will attract in the future the developing of numerous projects, the most promising ones being Bucur Obor and Bucurestii Noi – Jiului, which benefit from a good transport infrastructure. At the same time, Titan – T. Pallady and Expozitiei still have a high development potential.
The west of the city will attract in 2019 the majority of the dwellings set to be delivered, with a share of approximately 34% or 4,200 new units. The development of the middle market segment could also be seen in the developing of the north of the city, which hold a share of 20% out of the new offer, compared to a 19% share for the south of the city, a traditional residential pole in Bucharest.
SVN Romania is the biggest player on the residential segment, being the consultant and exclusive agent of over 10 residential projects with more than 350 units each, among whom are Cosmopolis, Belvedere Residences, Aviatiei Park, Baba Novac Residence, Parcului20, Soho Unirii or Tomis Park. SVN Romania’s consultants sold in the last years over 7,000 new residential units with an overall value of over 500 million Euros.
The company is also one of the most important players on the property management segment. SVN Romania manages approximately 550.000 square meters of office space and over 1,000 commercial spaces, among the most important clients being Telekom Romania, Banca Comerciala Romana and UniCredit Bank. The company also operates an regional office in Cluj – Napoca, active on all real estate market segments, and a credit brokerage division – SVN Romania Credit & Financial Solutions.
SVN International Corp. has over 200 offices in eight countries and regions (Australia, Canada, Caribbean, Mexic, Romania, Russia, South Corea and United States of America) with over 1.600 real estate consultants and staff.