As reported recently by RadioCluj.ro, the prices of real estate in Cluj is currently frozen, with sales dropping, even if demand is still high. It seems that despite investors purchasing land for property development, the price per square meter will fall, compared to last year.

Gigi Ştefan, a real estate agent in Cluj-Napoca, explained what we can expect from the real estate market for 2019.

The radio interview has been translated from the article on Radio Cluj’s website. Original content can be located here (RO): http://www.radiocluj.ro/2019/01/25/piata-imobiliara-clujeana-este-in-acest-moment-inghetata/

Gigi Stefan: At this point we can say that the market is blocked due to the high prices. Let’s start with a 2-room apartment, because they are the best-selling: the price is from 1500 euros per square meter (semi-finished or unfinished in old block).

Alina Nechita: What does the real estate market mean?

Gigi Stefan: It is not selling so much, as it has been over the past few years. The first house [program (Prima Casa) works, the funds are there. But Prima Casa is a limited program for lending: 57,000 euros in old blocks and 65,000 euros in new blocks.

At this time the thresholds are exceeded and automatically any buyer has to cover the price difference from their own sources. And we are not talking about 5%, we are talking about a much higher amount. It is very hard for them to cover up with the emergence of a new generation of buyers in the real estate market, who are only now aware of their potential: they are doctors.

Alina Nechita: There are different types of behaviors for buyers in Cluj: they come from abroad and buy many apartments to rent them, or they come from other counties – Bistrita, Moldavia, even beyond the Prut – and buy land, apartments, office space. What is in fact going on?

Gigi Stefan: Many of the Romanian buyers, live abroad. Because they interact, there are communities that they have created through groups. These communities are exactly what you said: from Galati, Moldova, and other areas. The trend is to buy the apartments and to rent to tenants to cover the costs of the apartment.

We also have a problem with the office /commercial side. At this point I can not say that you can find well-arranged offices. In addition, with many of the existing spaces we have a problem with the ISU’s approval, they are not officiated in terms of their functionality. 80% of the buildings in Cluj do not have the ISU notice of operation, which is mandatory.

Alina Nechita: You say they buy more 2-room apartments. Since when did this trend start, and what do you think will happen in 2019: will this trend of purchasing 2-room apartments continue, or will studio apartments become popular again?

Gigi Stefan: The trend will be also 2 rooms. Even if it’s a bigger financial effort, but 2 rooms are more functional for any type of buyer.

Alina Nechita: Is it better to rent the apartments that are very well finished?

Gigi Stefan: There is a problem, because the rents are very high at the moment. There are a lot of properties for rent on the market, which we haven’t seen before. We are mainly talking about the central area, where one year ago – say, summer – you had no trouble finding a tenant for €350; At this time there is a lot of €350 euro, apartments on offer that are not rented. Developers who offer blocks even if they do not have “Proces verbal de recepţie” (a legal requirement), but the apartments are functional and can be rented.

Alina Nechita: Is construction continuing?

Gigi Stefan: Construction will continue. Ultimately, the reality is that we are talking about the profit side. There will be a few projects in the semi-central area, and the prices appear very good, between 1350-1400 euros per square meter.

Alina Nechita: There are many variants of apartment blocks that are purchased even before the construction begins. How safe is this type of behavior for the buyer? Do they have any guarantees?

Gigi Stefan: I can not recommend this. Without the land registered, the building doesn’t exist. These apartments are sold, but the land registry is like the identity card of a person. Anyone who sees a price below 1,200 euros per square meter in Cluj should ask the question: “Why?” There are some scammers, for example, on strada Fabricii. I am now shocked when I hear that 50000 euros is paid for a block that looks like a bombsite.

Alina Nechita: What do you risk if you take an apartment that does not have CF yet?

Gigi Stefan: For the blocks in recent years, the recommendation is that people look at whether the block has the correct number of floors. Let’s not forget that in Borhanci there are blocks from 2007 that do not comply with the building permits. There are many blocks in which people have been living in since 2007, and they have no land registration, because they did not respect the building permit and have non-declared extra floors. From a legal point of view, those floors should be demolished, but that is not the case.

Alina Nechita: Are there many young people who are looking for a house in the outskirts around Cluj, has this market increased?

Gigi Stephen: It will continue to grow. Take, for example, three-room apartments: it’s a segment that makes shoppers flee to rural areas. Because taking a 3-room apartment in Cluj now starts at 85,000 euros, while in the surrounding areas you get a duplex house at 81,000 euros.

Alina Nechita: When did these types of sales start to grow?

Gigi Stefan: Last year. In the last year there was an explosion in the real estate market on prices. The market will settle, however, it will regulate.

Alina Nechita: What does it mean if the market settles?

Gigi Stefan: It will settle at a realistic purchase price. Banks do not work without credits, they are based on credit. In a few months the banks will return and give credit, there will be a way. Cash is not on the market, it works on the basis of the credit system.

Alina Nechita: What are the most coveted areas for new buildings in Cluj?

Gigi Stefan: There are several areas that are currently defined: Soporu (which will continue to grow very large), Borhanci (focusing on the area of ​​houses), Buna Ziua and Euorpa on the housing side.

 

Disclaimer:

This translation was performed with input from Google Translate, and reviewed / corrected to ensure that the data is as accurate and close as to the original interview as possible. Some errors may be present.

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