Lessons from an exibition
Lessons from an exhibition:
What Romanians want TODAY
On Sunday it was the last day of “Condominium Fair”, the first exhibition of the year for residential projects. My company participated there with a stand, but we did not present one exclusive project. We usually present to people many offers, over 200, so as to match with the REAL needs of the clients. Also, we have the ability to discuss and to find what the client wants, totally customized to his needs.
As we participated also to the “Condominium Fair” of 2007, I am able to compare the 2 events. They were both successful, mainly because this exhibition is the first of the year. Also, the stands were all full, with serious companies there. This year, as the exhibition was held in the center (Sala Palatului – in the proximity of Hilton hotel) and not in Sofitel hotel in north, the guests were plenty, even if 20% of them came for a “free tour”.
So, let us see… What are the lessons we took? (Guys, I hope you don’t expect me to tell you all my secrets and all the things you are supposed to pay for a market research, so as to have a full overview of the market. I have this data too, but only upon request and after an agreement between us):
- With over 200 clients asking us for properties, we have more or less a serious number of requests. It is really interesting that only 15% of these requests want to purchase a new home out of the city limits.
- Surprisingly, out of this 15%, two in three clients prefer the eastern and southern areas. The northern is considered too expensive and with many problems of traffic.
- Thus, I become more and more afraid of Pipera and Corbeanca in terms of proposing to my clients to invest there, so as to develop a residential project.
- Most of the companies started to present in the exhibitions only the projects with low or medium prices. The “high class” or expensive projects are not presented in the exhibitions nowadays because the clients who go in these events are mainly interested for low prices.
- The majority of the Romanian people are interested in prices of apartments which do not exceed 1.500 – 1.700 euros / sq.m. (constructed area)
- Most of them want small surfaces, so as to be able to purchase them without many problems.
- Even if it sounds weird for most of the foreigners, still the majority of Romanians would really like to avoid (by all means) taking a loan from a bank. The 20 – 30 years of duration make it appear like a “death sentence” in their eyes. And now after the bubble of the subprimes in USA, they are even more afraid, either they know what really has happened or not.
- 40% of the clients know well the prices in all the areas and they know what they ask. Another 20% knows but pretends it doesn’t know and the last 40% simply does not know.
- People are not easily convinced to move “in the middle of nowhere” just for a new home and a better price. They really want to change their life and this means a big list of requirements they have. (For me this is good, because the more demanding the clients will become, the more money will be earned by the serious brokers).
- The areas that normal people choose to live are the same like in 2007, with an addition of couple of new entries, very close to their preferred ones. Trust me, for a Romanian person the criteria are totally different than for a foreigner. Actually in most of the cases I tend to agree with them, as they respond to reality, not to stories of their own countries like “this area reminds me THAT place of my home city. I will develop a project here and I will sell good, because this is what would happen in my birthplace too”. (yeah and I am Diego Armando Maradona, with more height and kilos…)
- I had more than 40 Romanians interested in Greece. We were the only company selling Greece and also the only one in Romania with experience in transactions in Greece and with someone real expert to explain all to the clients (yes, this is me, presenting myself in my… modest moments). Our target this year is to be the no. 1 company for properties abroad.
Conclusion:
The period of small competition and prices easily risen has expired. The competition in residential market will be tougher month after month, while also the clients will be more informed and will know better their needs. The time of the crooks is about to pass, very soon Bucharest will enter in a mature residential market, especially when the offered product will match (in terms of quality) with the demands of the clients and the asked prices.
Residential is my favourite segment in Romanian market and the field I will invest most of my money this year.