Looks like we reached it, welcome to the “rock bottom”


During the period 2004 – 2007, we could observe prices rising on every day of every week. During this "race" a friend of mine used to call me every month. After the usual pleasantries, his only real question would eventually emerge: "So, Mr Romanian… do you people still climb over there?" He was referring to the prices… "Where are you now? At what height?" Being Greek, and coming from Katerini which is very close to (the famous) mountain of Olympus , my replies were always describing landmarks of the mountain. In the beginning I was talking about the roots, then I went up and up… it was 2008 when I told him that we reached Mytikas top, the highest level of Greece , 2.918 metres.

The mythical mountain of the 12 ancient Greek gods was not tall enough so as to match with the level of prices during 2008. When he heard "Mytikas" the first time, he started laughing… "You can not compare Romania with England or France" and all the next times he was replying "You know, at Mytikas you can not breathe good, you will feel dizzy if you stay for too long". And then things changed…

The prices started falling in the last quarter of 2008. During 2009 we… "walked down the mountain" really fast. How fast? From the mountain's top, we reached the sea level and soon we dived into it. The minimum decline was -30% while we saw prices collapsing down to -90% from their artificial level, from their "Mytikas" top.

He called me again during the first weeks of the year. "How good do you swim?" he asked me. "Good enough so as to handle the situation. But now it is the time for sea diving and in some cases for the old famous Jacques Cousteau to become active again". "Is it THAT bad?" "Let us say that things have returned to order, in half of the cases. The other half insist on being… alpinists, refusing to accept that the prices are different nowadays". "Good, so did we reach the bottom?"

This is the question that everyone has in mind today. "Should I invest now, or should I wait for even lower prices?" In the same time, there are many others who ask "should I sell now or should I wait for higher prices in the next months?" The answer is not simple, but I think clear enough:

  • Romanian economy will improve during 2010. "Difficult" measures are expected, which will resolve many problems of the past. But this does not mean better days for the people in this year. We should wait 2011 for this.
  • Some banks will start lending money. These loans are not expected to be cheap though.
  • If someone really wants to sell, he accepts a price which is attractive enough for the one who really wants to buy. This is visible since the beginning of the year, as we also have more investors taking into consideration an entry in the market.

I think that during the first half of the year, maybe in the second half too, we will understand that we are at the "rock bottom" of the market. This does not mean that the market will revive soon. But whoever wants to enter, he will have no excuse to wait furthermore. Yes, there are many unserious people still out there. But Romania's potential is excellent for the years to come and now we also find many logical people to deal with. In the same time, many owners who will organize themselves properly will see serious clients and deals on the table, for the first time since almost 18 – 24 months now.

This situation can last for 6 months to no one knows exactly how much. But this period has started (and in some categories of properties which are sold to Romanian clients it will not last very long). So, if you like… swimming, this is your year!



  1. A disgruntled fan Feb 16, 2010

    Ilia, 50k euro for ultraperipheral flats in Bucharest and Cluj and 45 in Timisoara is “rock bottom”?

    I’ve been reading you with great respect for your opinions, but if this is rock bottom then I’m taking the next plane to a country that doesn’t make me unable to live in at a small (albeit a bit over the French uneployment payment) income more than 1000 euros per month.

    Like Nicaragua. Or Columbia. Or the Centrafrican Repbulic.

    I do not see anything else than B or C class office space having potential in Romania, sorry.

    You can stay here and play with Romanian and Greek real-estate that is worth something only to people who have sustained severe blows to the head as infants.

  2. A disgruntled fan Feb 16, 2010

    Of course, being a bit angry, i forgot an “in” and an “of”, sorry for that.

  3. Marian Feb 16, 2010

    Greece, right?
    (Greece reached rock bottom, not real estate prices in Romania)

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