Bjorn Hauge manages a company that bought 800 apartments in Bucharest and failed to sell any of them. Still, the businessman shows some optimism when referring to the future of the market, although he admits, in an exclusive interview for HotNews.ro, that the market "is strange".
Bjorn Hauge's company bought 800 apartments in Bucharest for 85 million euro in 2007, after first entering the market in 2006. The apartments were part of seven different projects: German Residence, Vitan Platinum Towers, Planorama, Blue Tower, Ten Blocks, Armonia and My Dream Residence. Although the market has come to an abrupt stop, the company will still invest in two new residential projects in Bucharest and prepares to sell 35 apartments from its stock.
Since the market ius frozen, the company will sell only a maximum of 100 apartments for the moment, waiting for the moment when the market grows back, so that the scheduled profits would not be affected.
The businessman believes that the reasong that led to the current blockage are mainly psychological, not economic. The delays in the delivery of new apartments and the quality differences betwen projects with similar final prices may be some of the reasons that made Romanians stop buying for a while.
The demand for new apartments already reached some 200,000 - 300,000 units, the real estate dealer says, and some 50,000 - 100,000 new people move to Bucharest each year, needing a home. Under these circumstances, the apartments may be considered as theoretically sold. Profit rate is expected to reach 40%, considering the acquisition price and the final price, at least in the medium price market. "It is easier for an 100,000 euro apartment to be sold for 140,000 than it is for an 300,000 euro apartment to grwo to 420,000", Hauge says.
One of the problems to be solved is the credit offering from banks, where mortgage credits are not yet popular.