A drastic reduction in the number of speculators – whom the GM blames for the property crash – is another factor, according to Crivii. “The extremely high prices with no economic grounds, which were caused by speculators, are the reason for the crisis on the real estate market,” said the general manager.
Speculation occurred as a result of high residential demand and buyers' willingness to borrow far beyond their means, according to the evaluator representative.
Now, the market has reversed, with supply far outstripping demand. Crivii believes the situation could change when prices fall low enough to get buyers interested in the property market again, and when access to bank loans improves.
Last year, the evaluator saw its turnover rise by 12 percent over 2007, due to a focus on business evaluation which represented 60 percent of the overall turnover, the rest coming from evaluations of prior loan guarantees for individuals.
“Basically, the average value of our evaluation reports increased because we got involved in several major corporate transactions, while the number of real estate evaluations decreased at the same pace as bank credit began to shrink, in the second semester of last year,” said Crivii.
In 2008, the company provided evaluation reports for companies such as Hidroconstructia, the Property Fund, Romstal, Alexandrion Grup, MOL Romania and Kaufland Romania. In 2009, it is working on ongoing financial reports for Transgaz Medias, Conpet Ploieti and Electrica, following auctions won at the end of 2008.