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Real estate brokers estimate price drops for houses and higher prices fore rentals
Over 40% of real estate brokers consider that house prices will drop by more than 20% when the law on debt discharge comes into force, while the rest expect increases by 10-20% for rents, according to an opinion poll made by Imobiliare.ro website.
“Over 80% of brokers consider that the present form of the law on debt discharge is a major risk for the real estate market in Romania. 45% of respondents consider that we will witness a crash of the real estate market, similar to the one in the economic crisis period, while 37% expect a temporary slowdown,” according to the opinion poll made among 400 real estate agencies at the National Edition of the Professional Real Estate Club.
Two thirds (64%) of participants in the poll consider that a possible increase of the down payment requested by banks when granting mortgages will negatively influence the real estate market in Romania, as a result of the dropping number of eligible clients or the increase of the prudence level manifested by banks. Only 4% consider that such a measures will have no effect on the real estate market.
41% of real estate agents interviewed consider that prices of housing units will be significantly affected, anticipating price drops of over 20%, while an equal number estimate that drops will be around 10% or more. At the same time, 12% of participants in the poll consider that the drop of real estate prices will be no more than 5%.
When it comes to the evolution of rents in case the bill on debt discharge passes, 30% of respondents think it will be significantly affected by 20% or higher increases, while 45% expect increases of about 10%.
Most people interviewed consider that the economic effects produced by the law on debt discharge on the real estate market will be significantly negative, according to the Imobiliare.ro press release.
55% of agencies that participated in the poll think that building sectors will be deeply affected by law effects, especially by the loss of jobs. Only 8% of respondents consider that demand and offer will be immediately balanced, and the market will continue to function.
According to participants in the poll, the top of negative effects the draft law will have on the real estate sector includes the downfall of real estate sales and the significant increase of rents, as well as the disappearance of the First House program from bank credit offers.
The debt discharge bill is analysed when the real estate market has shown signs of recovery after a gridlock period when prices dropped by over 50%. According to Imobiliare.ro, the average amount requested for apartments on sale at national level (old and new) has grown by 6.7% in the last 12 months. At the same time, in Timisoara and Cluj Napoca, increases are of 12.9% and 13.5% respectively.
The law allowing debt discharges will be debated in Senate and the final vote will be given by the Camber of Deputy plenum.