What the newspapers say: May 26, 2008

Prices may fall soon on the Romanian real estate market, with Bucharest leading the way towards more affordable prices. After years of uninterrupted price growth, up to the limit where prices could be compared to Western Capitals, it seems that the critical level was reached and the market may return to normal.

At least, this is what a wide article in Gandul lets us believe: real estate projects face more and more problems. 29 villas were supposed to be built in the Southern area of Bucharest, for 200,000 euro + VAT each, but only 19 buyers were found and the project was abandoned. Radu Zilisteanu, head of the Real Estate Agencies Association, says that some 35% of all real estate projects will become reality. UK-based Willbrook Management, one of the most important developers in Bucharest, announced that it will complete its 25 projects it has on the roll, but will cease its activity afterwards. Quality Living Developers, known for its projects in Bucharest, begun to move its operations towards Brasov and Constanta. Others quit their projects because of the bureaucracy and the lack of infrastructure, Gandul reads.

The same newspaper also announces that the price for semi-central terrain in Bucharest fell some 20%, after reaching a record price of 5,000 euro per square meter six months ago. The sky-rocketing prices cut the profits for developers close to zero, therefore many preferred to focus their operations to more remote areas. In Northern Bucharest, the prices continue to grow, the approval for several projects making the prices jump 250 – 300% in 2007.

Speaking of real estate and bureaucracy: seven Romanians were arrested in Chicago last week, for bribing local authorities in order to get positive grades in all their inspection reports, Evenimentul Zilei reads.

Anyway, things seem to be on a positive trend: a Consensus Economics report, based on the prognosis at 12 banks and international institutions, indicates Romania as one of the few states where the economic growth will continue. The GNP growth for 2008 is expected to reach 5.7%, 0.1% than estimated a month ago and 0.3% than estimated 3 months ago. The Romanian National Prognosis Commission expects a 6.5% GNP growth, Cotidianul notes.

Last, but not least, the main good news is that Romania won another Palme d’Or award for short film, with „Megatron”, a film by Marian Crisan.