“Ilia, why would any logical person invest now in… your Romania?”
Hello from Athens. I am here since Monday and tonight I return to Bucharest (carrying a new deal “in my luggage”). I had to attend an important event, but ofcourse my programme was full of meetings with clients, potential clients, business partners, journalists and couple of friends.
After a short analysis of the dramatic situation Greek economy is facing, very soon the subject of every discussion was focused on Romania. Very few Greeks have an objective overview about the Romanian reality today. Greek media don’t help much, so everyone had plenty of questions to ask.
Romanians still don’t realize how the foreign investors see them…
It is sad, but it is true. The vast majority of Romanians (and many foreigners too!) in Real Estate, from brokers to owners and anyone else involved in this market, still do not realize how the foreign investors see the country, the properties, them as collaborators. They still think that it is only a matter of time until the market rebounds and the foreigners return in Romania, “because they made a lot of money here”.
I don’t think that this is 100% accurate. I will present to you today few of the questions I heard during these days (and I keep hearing everywhere I go…) and also I will give you my replies. These questions, more or less, are the same that everyone else hears, when he gets in contact with foreigners who want to know more about Romania.
“Ilia, why would any logical person invest now in… your Romania?”
“In 2006 – 2008 you were asking me to find for your opportunities and you were upset because you could not find any. At that time, you knew 100 advantages of Romania. Well, most of them remain until today too, like the country’s future potential etc.” (analysis of advantages usually follows)
“Now, after the prices have been fallen by more than 40 – 50%, we may find opportunities for a good investment. There are not too many, but there are. And after the crisis, Romania has stronger chances to rebound soon”.
“Aren’t the prices going to fall much more?”
“I guess yes, but in some cases we are almost at the bottom. Plus, the important is to combine a top property with the best possible price. If we just target prices, we will end up with second or third category properties in our portfolio.
Today we have the real prices of transactions and the asked prices. The transaction prices will not really decline much more, the issue is that we don’t have many properties being offered at this level. During the following 6 – 18 months we expect more properties to be offered at this price range. So, the period looks excellent for investors and it will be a pity to lose the chance to obtain a very good property at a very good price”.
“Is Romania stable today? We hear that there are many problems”“There are problems indeed and we expect solutions to come during the following months. But this period will not last forever”.
“When is Romania going to rebound?”
“As Romania is strongly connected to Western Europe, I think that once France, Germany and other European countries rebound, Romania will follow them with 6 – 12 months delay”.
“Is Romania safe? In our country we hear about Romanian criminals almost every day”
“Romania is safer than the majority of European countries. A foreigner can easily live in Bucharest or any other city, without problems. Many criminals “work” abroad, because they find it easier to do their activities there and more profitable too. Plus, with all the good and bad things that it might have, Romanian police maintains a feeling of safety for people. I feel very comfortable living in Bucharest”.
“I know many people who lost money in Romania. Why should I attempt to invest somewhere, where the risk is very big?”
“The ones who lost money in Romania belong to several different categories:
– There are the ones who lost, because they just bought expensive properties. This happened all around the world, not only in Romania.
– Some others lost money because they refused to sell with huge profits, they wanted even more. Romania gave them the chance to multiply their money. Now that the market changed, it is not Romania’s fault if someone was too greedy.
– I know plenty of cases where people avoided professional consultants, in order to save money. English people say “you pay peanuts, you get monkeys”. So these people lost money because they were “cheap” with their collaborators. I wonder, why someone in Greece has the top consultants in every field of activity and when he comes in Romania he tries to invest by hiring the cheapest ones?
– Don’t forget that quite some guys came in Romania for… fun and bought also something… by coincidence. We notice that most of them have trusted persons who (even by view) are completely inappropriate to advise anyone for anything. They bought something with criteria like “the agent who showed it to me is very hot” etc. I don’t feel pity for them.
Usually serious investors avoided all these traps. Still some of them lost, because they entered late. But now that the market has changed, you can have a “healthy” entry in Romanian market, learning by the other people’s mistakes”.
If we don’t explain Romania’s (true) potential, foreigners don’t “know it better” anymore…
I will not bother you by presenting all my answers. There are tens of questions, related to all kinds of issues, from economy to society and from properties to whatever else. Unfortunately, very few people in Romania try to explain to them the (true) potential of Romanian Real Estate market. Usually they tell them some “easy theories”, but the main idea is “you know better why to invest”. This is one of the reasons why foreign investors have avoided Romania over the last 2 years, because it is not very clear for them, in order to “know it better by themselves”.
The period of “sitting behind an office and earning easy money by desperate foreign clients” has ended forever. Are you ready for the new era of Romanian Real Estate market?