JLL: Romanians Still Can’t Afford New Apartments

05.03.2011 By Andrei Circhelan

New apartment prices are still too high for Romanians, while developers are getting signals that they can no longer count on government support, real estate consultancy firm Jones Lang LaSalle, or JLL, said in a report Tuesday.

"New supply will need to be better adjusted to local demand, while the existing offer of apartments on the primary market will need to see a further decrease in prices in order to regain a decent level of sales," the document reads.

"The substantial drop of the value of the third (First Home) program, worth EUR200 million compared to an average of EUR700 million of the previous edition, indicates that developers may not count on significant assistance by the government, while the banking sector still remains weak.

The continuous decrease in sale prices has not fueled demand for new homes, since prices are still not adapted to local demand.

"Too large floor areas translate into a higher total price per apartment, which many prospective homebuyers can simply not afford. Also a large part of the primary market offer was aimed at the upper market segments which has limited purchase power nowadays. On the other hand, lower priced projects usually offer mediocre quality and location, often with poor provision of infrastructure," the JLL report noted.