The monthly instalment of a loan for the purchase of athree-room apartment in Bucharest has dropped from around 600 eurosto 350 euros in less than two years amid the almost 50% lowerprices for housing units and the lower interest rates through the"First Home" programme, a ZF survey reveals.
Whereas in March 2008, when old apartments of Bucharest reacheda high of around 2,060 euros/square metre, three-room apartments ofdistricts such as Drumul Taberei or Titan cost 120,000 euros,according to ads posted on real estate websites. Banks asked for a10-15% down payment and the interest rate for long-term loansrevolved around 7% per annum. Under those circumstances, for a20-year 100,000 euro-loan, instalments revolved around 600 eurosper month.
At present, the same apartment can be bought with a similar downpayment (13,000 euros), but with a loan of "just" 57,000 eurosthrough the "First Home" programme, for which the monthlyinstalment stands at 350 euros, on a 20-year period.
"I do not believe 'First Home' modifications will influenceprices that much. Those who awaited the programme modification arelikely to shift to new housing units, where developers areconsidering coming up with projects at lower prices," says ValentinIlie, CEO of Coldwell Banker real estate consultancy.
As regards rental prices, a three-room apartment can becontracted at present in all peripheral districts of Bucharest with350 euros per month.
In recent months, prices of old apartments of Bucharest haveremained flat, at around 1,100 euros/square metre, and consultantsbelieve no significant trends will be registered on short term.
What is important for the real estate market is how the "FirstHome" will be modified in mid-February, as developers are pushingfor the programme to be directed toward the acquisition of newhousing units. Such a move would have a deep impact over oldhousing units, whose sales have been mainly boosted by thisprogramme.
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