How will the Romanian residential market be affected by the Covid-19 pandemic?
The urge to “stay safe, stay home!” has received a new connotation in the last two months, after the beginning of the Covid-19 pandemic, and the first results indicate that this period puts a mark both on the appetite for real estate acquisitions, as well as on the customers’ preferences.
The real estate consulting company Cushman & Wakefield Echinox and the law firm Dentons are launching for debate a series of 10 topics that will impact the development and transactional activity in the residential sector, a booming market that has recorded in 2019 a record in terms of deliveries for the last 30 years, with 67,512 units put into use throughout Romania.
With almost 15,000 new homes completed in the Bucharest – Ilfov region in 2019, also a new record in the last 30 years, and an equally consistent construction volume, the Capital’s residential market will search for its balance between two categories of clients: the reluctant buyers, who will postpone a potential purchase until the medical and economic situation is cleared and the clients in search for an increased residential comfort for the eventual new self-isolation measures and for a more appropriate teleworking framework, a trend emphasized by the Covid-19 pandemic.
The 10 topics considered essential for the evolution of the residential sector:
- How big will be the impact on the demand for new homes in the short, medium and long term? How was the situation in the last weeks and how is it influencing the new trends?
- How will this period influence the transactional prices for new and old apartments? What about for the villas with a large garden?
- How will this pandemic influence the preferences about where we want to live? Will we see an impuls for developments in secondary cities or even “at the countryside” in order to avoid the traffic and pollution of the Capital? Will we see a boost in residential development horizontally, by creating communities of houses / villas in the suburbs of big cities?
- Will teleworking influence the market, by increasing the demand for temporary holiday homes to allow some employees to work for longer periods in their homes located at the mountain or near the seaside?
- How will teleworking change the houses configuration? Will the demand for larger properties increase? Will there be new configurations, such as separate or separable offices?
- How is the work carried out on construction sites during this period? Are delivery dates impacted? How did it affect the customers who already paid in advance or have booking fees? What contractual solutions exist? Will there be delays in starting new projects?
- How will mixed projects, which combine the residential component with retail and office spaces, be influenced?
- What position will banks take in terms of corporate and retail financing?
- How could the possible conflicts between developers, construction companies, banks, potential buyers be managed?
- Similarities and differences between the situation from 2020 and 2008 regarding the evolution of prices, salaries, leverage degree, bank deposits, structure of loans (RON vs. EUR), etc.
These topics are to be discussed in a webinar hosted by Cushman & Wakefield Echinox consultants and Dentons lawyers and representatives of developers and banks.