Old apartments undergoing correction, study says

According to the company's statistics, February 2008 was the only month in three years of continuous growth when the prices of apartments in Bucharest fell.
“The average price of apartments in Bucharest has increased by 184 percent since January 2005, from an average of EUR 509 per sqm to EUR 1,888 per sqm in May 2008,” said Bogdan Georgescu, general manager of Colliers International.
February brought a correction of EUR 50 per sqm to the price of apartments: in January, an apartment in Bucharest was on sale for EUR 1,826 per sqm, while in February, the price was EUR 1,776. According to the research, the prices of apartments started to increase again in March, to reach EUR 1,887 and EUR 1,888 in April.
Colliers specialists predict the price of new apartments will go from EUR 1,150 to 2,200 per sqm, not including VAT, in 2008, but that old apartments will undergo a 5 to 15 percent correction in price. Regarding stock supply and deliveries, company analysts reported 2,000 new units sold in Q1 of 2008, almost double the figure in Q1 of 2007 when 1,100 units were sold in Bucharest.
They estimate that 19,000 new homes will be delivered in 2008, from 42 projects.
In terms of the volume of transactions, Colliers representatives report a drop of 30 to 50 percent in the volume of transactions on the residential market in Q1 of 2008, owing to the higher cost of borrowing and general fears on the real estate market, a trend they think will continue over the coming months.

Magda Purice