National Prognosis Chief: Romania's pace of growth will probably slow down

Romania will not face a real estate crisis as long as the real estate market is made up by rural area constructions and those in private management, Romania’s National Prognosis chief Ion Ghizdeanu declared. He added that some prices for residential houses decreased but not because their activity stopped but because of market perception pressures.

In Romania, the residential market only amounts to 15% of the total value of constructions works. Ghizdeanu declared that in 2009, the constructions sector will grow by 13% if the economic grow will stabilize at 6%. This year alone, constructions will witness a 29% increase.

Ghizdeanu declared that the construction authorizations offered by city halls increased in August, which, in his opinion, is the best indicator that the market is not witnessing any failings. According to him, in the first quarter of 2009, some 70,000 constructions will be finished.

Romania has two big advantages, both from the market’s under-development stage: almost 65% of consumption is concentrated in the food and other goods sector and the other element is self-consumption. Romania, has a natural economy that is less flexible to the crisis, unlike Bulgaria.