Abstract
This is the first edition in BMI’s new series of reports on real estate
sectors around the world. We have
sought to incorporate data and insights
from our reports on infrastructure and commercial banking – as
well
as our own forecasts for the economies of the various countries that we
survey.
Key issues – Romania
We suggest that the following are
the key issues to monitor for the real estate sector in the coming year or
so:
• The major challenge is the relationship between the growth in
lending and the growth in nominal
GDP which is currently exceedingly
high.
• Romania’s financial infrastructure is not strong, bank
lending has been constrained and
deposit/loan ratios have fallen. However
bank lending is anticipated to grow confidently – at one
of the
strongest rates in the world over the next five years.
• There is
good room for growth in the construction sector, given the still substantially
rural
population. Very strong construction growth is anticipated over the
next five years.
• Any clear sign in improvement in bureaucracy and
the legal system.
These conclusions are based on our proprietary Real
Estate/Construction Business Environment Rating
(RECBER), the component
factors of which we discuss in detail. The conclusions are also set
against
recent conditions in the commercial office market – for
which we have used office rents in major cities as
a proxy and in the
residential real estate market – for which we have used housing prices
as a proxy.
A major trend throughout all our real estate reports is that,
mainly due to the global financial crisis, access
to funding will be more
important than usual. Accordingly, we have incorporated overviews of
conditions
in the commercial banking sector – both globally and in
the region of each country. We have also looked
at the issues that will
drive the fortunes of Real Estate Investment Trusts (REITs) over the
coming
months.
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