BR Analysis | Retail investors still looking for real estate opportunities

Sticky interest rates and rising real estate prices are not stopping investors from looking for ways to invest in apartments and houses. For Romanians, real estate remains a safe and secure asset class that is profitable in the long term. In this context, there is a lot of interest in finding out which areas are the safest to live in across the country and its main cities.

By Aurel Dragan

A market survey measuring retail investors’ appetite for the real estate sector, conducted by MKOR for Build21—a Romanian real estate startup that aims to design and build 21 real estate projects that represent benchmarks in terms of sustainability, efficiency, aesthetics and care for quality of life—shows that retail investors in Romania are primarily interested in the real estate market, regardless of investment power: those with no experience in this vertical have amounts from EUR 1,500 upwards, while experienced investors’ main objective is to purchase a property within the next 12 months. The MKOR study took a sample of 255 retail investors, aged between 20 and 55, with individual incomes of at least RON 4,000 per month and residing in medium and large urban areas. Of these, 66% were experienced real estate investors, with at least one previous investment of this type, and 35% said they were interested in the real estate sector and expected to invest at least EUR 1,500 over the coming 12 months. In terms of general investment habits, the survey shows that investors prefer low-risk investment products, with 8 out of 10 respondents investing in bank deposits and certificates of deposit. In addition to buying property for personal use and as an investment, experienced investors rank ETFs and real estate funds (63%) as well as real estate investment through crypto tokens (57%) as the most common investments. Also, 6 out of 10 experienced real estate investment respondents have also invested in cryptocurrencies, while 1 in 2 have invested in blockchain technology.

“At Build21 we aim to be the best real estate investment option for small and medium-sized investors. We democratise access to affordable Romanian real estate investments and at the same time create a community of investors around the 21 real estate projects we will develop. We use blockchain technology to give our investors the opportunity to get involved, but also security and transparency for their investment,” says Adrian Vasilescu, the CEO and Co-Founder of Build21.

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For those planning to invest in real estate in the next year, the top criteria for choosing an investment are risk and return (51%) and investment costs (49%). When talking about their expectations from existing real estate projects, 58% look at the provision of basic services (running water, gas, electricity) and 47% check safety and resilience to natural disasters. Smaller shares are interested in green spaces (37%) and road infrastructure and pedestrian areas (36%).

“Romania deserves better standards in real estate, with an emphasis on the quality of construction and its impact on the lives of those who use it. For that, we need to change the mindset from investing in products that only meet basic needs, such as gas connections, to products with long-term value and major social impact,” says Adrian Vasilescu.

Safe cities

Another study shows how safe Romanians feel in different cities around the country. Currently, Brasov, Oradea, and Cluj-Napoca are the cities in Romania where residents feel the safest, according to the T.R.A.I. index developed by Storia, the real estate platform launched by OLX. Of the ten safest neighbourhoods in the country, seven are in Cluj-Napoca. Cities that scored lower in terms of safety were Tulcea, Ploiesti, and Braila. The index can be accessed on trai.storia.ro and it is a tool that gathers both objective data, taken from Google Traffic, Google Places, Airly, Storia, as well as subjective data collected from residents of the neighbourhoods included on the platform. Residents rated how safe they felt in their cities and neighbourhoods, giving a score to the statement “I can say that the neighbourhood I live in is safe.”

According to the T.R.A.I. index, Bucharest ranks 21st (score 75.6) in the Romanians’ safety ranking. The scores are interpreted as follows: the closer the score is to 100, the safer the city or neighbourhood is perceived to be. The areas in Bucharest that are perceived to be the safest, according to inhabitants, are: Vacaresti (score 89.7), Aviatorilor (89.6), Pajura (87.6), Floreasca (87.5), Arcul de Triumf (87.5), and Drumul Sarii (87.5). At the other end of the scale, the neighbourhoods with the lowest scores include Gara de Nord (score 52.8), Ferentari (58.1), Unirii (59.4), Obor (61.2), and Colentina (62.8).

Brasov currently ranks first among the cities considered to be the safest, with a total score of 83 points, followed by Oradea (81.8), Cluj-Napoca (81.5), and Sibiu (80.7). Also among the top 10 cities are Ramnicu Valcea (80.4), Alba Iulia (79.7), Miercurea Ciuc (78.4), Sfantu Gheorghe (78.4), Iasi (78.1), and Slatina (77.4). Slightly lower scores were recorded by Tulcea (score 68), Ploiesti (68.6), and Braila (70.6). Other cities with lower safety scores are Baia Mare (71.3), Slobozia (72), Deva (72.6), Calarasi (73.5), Targu Mures (75.5), Bacau (73.9), and Satu Mare (73.9).

“To complement the objective data provided by T.R.A.I., we also wanted to find out the opinion of the country’s inhabitants on other important indicators, such as their perception of safety. Cities such as Brasov, Oradea, Cluj-Napoca, and Sibiu scored very high on safety levels, Cluj-Napoca standing out with seven neighbourhoods included in the top 10. According to the data we analysed, even cities with lower scores got above 60 points (out of a maximum of 100), indicating that they are still quite safe. Another interesting aspect that emerged from our data is that people aged between 25 and 44 generally feel safer (scores above 78), while people over 65 scored slightly lower on average (74.7),” said Monica Dudau, Senior Marketing Manager at Storia & OLX Imobiliare.

The safest neighbourhoods

Two of the neighbourhoods with the lowest safety perception scores are in Bucharest: Gara de Nord and Ferentari. Other low-ranking areas are the West neighbourhood in Tulcea, Hotvon in Baia Mare, Bulevardul Bucuresti in Ploiesti, CET and Palas in Constanta, Transilvaniei in Buzau, and Mihai Bravu in Ploiesti. Two of the neighbourhoods with the lowest safety perception scores are in Bucharest: Gara de Nord and Ferentari. Other low-ranking areas are the West neighbourhood in Tulcea, Hotvon in Baia Mare, Bulevardul Bucuresti in Ploiesti, CET and Palas in Constanta, Transilvaniei in Buzau, and Mihai Bravu in Ploiesti.