The document discusses several indicators that could show the future direction of the Romanian real estate market. It analyzes factors such as GDP, FDI, exports, EU funds absorption, major public works, the banking sector, foreign investors, the business/political environment, and the European/world economy. It concludes that most indicators are negative for 2011 and do not show signs of a serious market recovery. Exceptions are mentioned for some retail segments. Overall the market is expected to remain blocked in 2011 with hopes for improvement in 2012 if key factors like FDI, EU funds, and the European economy start to strengthen.

1. Piata imobiliara incotro?
Which indicators
show us
the market’s revival (or not)
and when should it be expected

2.  Romania 2010 2011
 GDP Declined Stabilize or decline?
 FDI Reduced No sign of increase
 Exports Higher * Higher *
 Agriculture Excellent year ?
 Banks In trouble In more trouble
* due to Dacia, Nokia and Ford etc, but the rest of economy does not follow.

3.  Romania 2010 2011
 EU Funds Not absorbed ?
 Europe / World Bad Austerity Measures
 Political stability “Not the best” ?
 Business environment “Not the best” (Can it get worse?)
 Real Estate environment Still in mess (Can it get worse?)

4. Romanian Real Estate market
Residential segment:
 “Prima Casa” and foreclosures
 Banks don’t really finance
 The supply still does not match with the demand
 Exceptions simply confirm the rule
 Still high prices in several cases
Blockage

5. Romanian Real Estate market
Retail segment:
 Malls bankrupting
 Rents declining
 New projects
 Major retailers expanding
 Land transactions at “low” price levels
 Very careful decisions
Slow recovery, targeting 2012

6. Romanian Real Estate market
Industrial segment:
 Limited supply
 More demand than the past
 Land deals only with “low” prices
 Demand expected to slightly rise
 A lot of “relocation projects”
Slow recovery, possible increase

7. Romanian Real Estate market
Investments:
 Very limited supply of good properties
 Limited serious demand
 Majority of investors remains idle
 Few deals, only at “realistic” levels
 Too many expect the banks to sell off
 Financing is almost blocked
 “Diamonds” are still in target
- “Not so bad” in 2011, but no serious signs of recovery.
- Hopes for 2012.
- Exception : Details with retail destination

8. The main indicators that show us
the future of Romanian Real Estate Market
Foreign Direct Investments (FDI):
 Declined in 2009
 Declined in 2010
 No sign for serious increase in 2011
 Usually since the moment money enters, we should count
12 – 18 months in order for the money to spread in the real
economy
 2011. Not positive forecast
 How this indicator can be connected to a better Real
Estate Market as well :
 From the moment we see FDI rising, we should expect
better moments to come in 12 – 18 months.

9. The main indicators that show us
the future of Romanian Real Estate Market
EU Funds:
 Low level of absorption in 2009
 Low level of absorption in 2010
 Hopes for better results in 2011
 Usually since the moment of approvals, we should count
6 – 18 months in order for the money to spread in the real
economy
 2011. The forecast is related to politicians.
 How this indicator can be connected to a better Real
Estate Market as well :
 From the moment we see EU fund absorption rising, we
should expect better moments to come in 6 – 18 months.

10. The main indicators that show us
the future of Romanian Real Estate Market
Major Public Works:
 Very few in 2009
 Very few in 2010
 Without PPP, no serious hopes for much better results in 2011
 Usually since the moment of signatures, we should count
12 – 30 months in order for the money to spread in the real
economy.
 2011. The forecast is related to politicians.
 How this indicator can be connected to a better Real Estate
Market as well :
 From the moment we see Major Public Works being agreed and
signed, we should expect better moments to come in 12 – 30
months.

11. The main indicators that show us
the future of Romanian Real Estate Market
Banks:
 Too many problems and most of activities blocked in 2009
 More problems and unpaid loans in 2010
 “War” between clients and banks.
Consequence : Banks even more defensive
 2011 is expected to be the most difficult year of the banks
in Romania, for plenty of reasons.
 Are we going to see many foreclosures?
 Are the banks going to un-freeze loans for Real Estate
Investments (don’t bet on this scenario).
 2011. The forecast is negative.
Exceptions confirm the rule.

12. The main indicators that show us
the future of Romanian Real Estate Market
Banks (2) :
 2011. The forecast is negative.
Exceptions confirm the rule
 How this indicator can be connected to a better Real
Estate Market as well :
 Either when we see many transactions from banks’
portfolios, or when we see many transactions financed by
banks, it means that “the engine has carefully restarted”.
 The financing of several retail projects, where the tenants
provide strong corporate guarantees, just allows the market
not to cease.

13. The main indicators that show us
the future of Romanian Real Estate Market
Foreign Investors :
 They were the “locomotive” of the Real Estate Market’s
explosion during 2004 -2008.
 Almost ....”disappeared” in 2009.
 Extremely careful and selective in 2010.
 90% of them search opportunities, also ask the banks for
possible “liquidations”.
 10% of them slowly invest on real values, even when the
price is “more than nothing”
 They will remain defensive in 2011.
 Very few people realize that except the major investors, it
is vital for the market to re-gain the thousands of
“smaller” investors, investing 100.000 – 1.000.000 Euro
on properties.

14. The main indicators that show us
the future of Romanian Real Estate Market
Foreign Investors (2) :
 2011. The forecast is negative
 How this indicator can be connected to a better Real
Estate Market as well :
 Without more and determined foreign investors, the local
demand is not sufficient in order to revive the Real Estate
Market next year.

15. The main indicators that show us
the future of Romanian Real Estate Market
Business Environment / :
(Political instability)
 4 months of 2009 were “lost”
 New measures were announced in 2010, while thousands
of rumours were spread.
 Many small problems damage the business environment of
Romania, without any visible solution at the near future.
 2011. How will Romanian politicians behave?
 How this indicator can be connected to a better Real
Estate market as well:
 If measures and solutions will be implemented, then in just
6 – 12 months time the business environment will be
drastically improved.

16. The main indicators that show us
the future of Romanian Real Estate Market
Europe / World:
 Crisis started in 2008
 It continued in 2009.
 It got worse in 2010.
 Romania is connected to Western economies and it targets
to their revival, in order to rise as well
 2011. The forecast is negative, except Germany
 How this indicator can be connected to a better Real
Estate market as well:
 From the moment we see Western economies exiting the
crisis, Romania is expected to follow after 9 – 12 months.

17. The main indicators that show us
the future of Romanian Real Estate Market
Mentality / Business approach:
 Things were unbearable in 2008.
 A small minority “woke up” in 2009..
 This minority increased in 2010, but not enough..
 Too many people still search for “easy money”, no matter
how they will obtain it, regardless the damage they might
create.
 2011. More citizens will realize that 2011
has nothing to compare with 2006 – 2008

18. The main indicators that show us
the future of Romanian Real Estate Market
Mentality / Business approach (2):
 Is it possible for a critical mass of people to improve its
attitude towards each other?
 How this indicator can be connected to a better or
worse Real Estate market:
 - If tomorrow morning the market gets unblocked and the
same people start playing the same games, searching for
idiots to trick, the prices will sky rocket in just few months
and everything will be blocked for some more years.