“First Home”, on hold. Will the cap be raised?

The "First Home" programme, currently frozen, is set to be modified so that it should mainly bolster purchases of unfinished housing units, units built from scratch and new units, in the context where most housing units acquired through this programme in 2009 were old ones.

"The programme is open to all options, to housing units under construction, unfinished units and finished ones. Research shows that the over 10,000 applications for bought homes largely concern finished homes," said Prime Minister Emil Boc.

Developers and real estate agency representatives contacted by ZF say the programme should be continued in 2010, but with the necessary modifications so that it may have a multiplier effect in the economy. At the same time, they maintain that including ANL (National Housing Agency) in the programme would deal a lethal blow to the private environment.

The main change the private environment is awaiting is a raise in the ceiling for new homes, as they hardly meet the current 60,000-euro ceiling.

"From my point of view, the programme should be reviewed and reset on fairer bases, namely be mainly centred on new homes, because it is only these that have a multiplier effect in the economy. The ceiling for old homes could be kept at 60,000 euros, but the one for new ones should be raised to 100,000 euros," Cristian Clenciu, chairman of the Romanian Association of Real Estate Agencies, told ZF.

The programme is currently frozen. Starting January 1, the Guarantee Fund, providing state guarantees for mortgages released by banks, has not accepted any more applications as no normative document with regard to the sums due to be used this year has been approved.

Still, those who made payments in line with some pre-contracts for the acquisition of housing units through the "First Home" programme can still acquire the respective units, according to Boc.

The Guarantee Fund in 2009 received 11,500 applications and granted 485m-euro guarantees.