If in the past years, the housing rents’ upward trend and September, also known as “the month of students”, were pure gold for landlords’ budgets, in 2008, the growth was not as spectacular and property consultants expect the market to take heavier losses next year.
Gabriel Alexandru, vice president of Century 21 Romania, said in 2008, the prices for leasehold tenures had taken a 15% hike until October. However, things have changed starting October.
“Subsequently, rents have taken a downward trend. We have seen a roughly 10% correction in prices from prior year,” said Gabriel Alexandru, adding that this fallout was triggered both by the tougher lending conditions for mortgage loans, and by the international crisis.
The global financial crisis and domestic real estate crisis have hardly hit the rental housing market, and those who needed a dwelling, turned from potential buyers into potential tenants, while those who wanted to make profit from their real estate, started to rent the place, failing to find buyers at the price they were requesting.
“We have seen a similar behavior amongst developers. Oversupply have also started to have an effect, causing a 10% correction in prices from a year earlier”, said Gabriel Alexandru.
Anda Marian, Head of Residential Department at MediaCity explains how the prices continued their uptrend only in the first part of 2008. She signaled a nearly 10-15% growth for luxury apartments, compared to 25% in 2007. In case of single apartments, the growth was 2.25% while the rents for three-room apartments rose 13%, and 7% for four-room apartments.
“However, the second part of the year was dominated by substantial growth of supply in the midst of the new market conditions. One of the direct after-effects of the supply growth was the slowdown of rents’ growth pace, by a 5% margin”, Anda Marian told Wall-Stre