Mai mare|Mai mic

Low cost routes make Romania real estate attractive for UK citizens

de Radu Big
Miercuri, 6 februarie 2008, 14:14 English | Business

The measure of a good overseas investment property is not always how much the sun shines or how low prices are. Increasingly, we look at budget airline routes, The Telegraph notes in its Tuesday online edition, as quoted by Rador. 11 low-cost companies open 29 new routes in 2008. At the end of the runway, real estate agents wait anxiously for second home buyers. Following this logic, Romania seems to be destined for success, the British paper comments.

The main criteria are the flight frequency, the low fees and the travel easiness. Easyjet already opened Gatwick - Bucharest flights. Wizz Air expands its Liverpool and Luton operations to Bucharest and opens a new route from Luton to Cluj (Transylvania). Romania has its own 7 low-cost airlines and already became a highly demanded destination for low-cost services in other East European countries.

"All this is good news for investors who got in early, such as Philip Groves, a marketing consultant. He is buying a £50,000, one-bedroom apartment in mediaeval Brasov, Romania's seventh largest city, of just under 300,000 people. He says Romania is a good buy because budget flights are opening up tourist and business markets, EU accession will fund an improved infrastructure and Romanians have high levels of equity - they were "given" their homes when communism fell - and low levels of debt.

"It's a strong domestic market so I'm not reliant on international factors to provide tenants or capital growth. Plus there's an airport being built close by which is key, as it will encourage the development of a nearby ski resort," says Philip, who also has investment properties in western Europe.

He says he took precautions when buying. "I chose Anglo-Romanian Developments, an agency with experience in the UK as well as overseas, and the builder is part-Romanian, part-Belgian. There's also good security at the development - it's common in most new schemes to have 24-hour concierge services." Watford businessman Richard Rice is following suit, having just bought a holiday home at Mamaia, a Black Sea resort near the port of Constanta, a three-hour drive from Bucharest. "I'm confident I'll let it for holidays short term and that it'll be a good long-term investment," says Richard, who adds that the area is teeming with east Europeans, Germans and Italians, most arriving on budget flights.

Arc Property, a London estate agency specializing in emerging markets, sells homes in seven east European locations and says Romania is the most sought-after. "Few people so far want holiday homes, but interest in investment properties has soared in the past year. One-bed buy-to-let flats in Bucharest go from about €100,000 (£75,000) and prices rose 27 per cent in the first half of 2007 alone," says Alastair Norman, director of Arc", The Telegraph reads.

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