Romania

Romania is located in South-eastern Europe, bordering the Black Sea, between Bulgaria and Ukraine. With a population of some 21.7 million, it is the second largest country in Central and Eastern Europe. Since 2000, the Government has implemented macroeconomic policies which has resulted in strong GDP/ Capita growth over the last 5 years with Knight Frank predicting a 64.34% increase over the next 5 years. In addition, inflation and interest rates have declined. Export growth remains vigorous, fuelled by private investment. Romania is an attractive jurisdiction for international investors as a result of a strengthening economy, better sovereign ratings and improved access to international capital markets.

Why Invest in Romania

The Attractions of Residential Property in Romania

Residential property prices forecast to grow by 15% to 20% in 2006 and 10% to 15% in 2007.
Romania has applied for EU membership and is expected to join in 2007, and entry into the Euro could be as early as 2010.
Good size market – 2nd largest of EU Accession countries. Includes 8 cities with more than 250,000 inhabitants.
Low capital gains, income and transfer tax rates compared with EU 15 average.
Strong decline expected in interest rates.
According to Bank Austria Creditanstalt the Romanian economic growth since the early 90’s is second only to Asia.

Growth Drivers in Romania

EU membership anticipated in 2007.
Favourable supply/demand factors.
Strong increase in foreign direct investment.
Favourable macro economic forecasts (see table).
A high level of Foreign Direct Investment.
Low CGT.
Good infrastructure.

Key Risks of investing in Romania

Below average affordability.
Planning system inefficient.
Concerns over corruption.

	Romania	EU 15 Average
Forecast Changein Interest rates (2006 - 2010)	- 5.06%	0.72%
Forecast Employment Growth (2006 - 2010)	- 0.8%	4.03%
Forecast Earnings Growth (2006 - 2010)	51.83%	18.35%
Forecast Inflation (2006 – 2010 av. % pa.)	4.07%	2.04%
GDP/Capita (change 2006 - 2010)	64.34%	35%

Summary of why to invest in Romania

EU membership anticipated 2007.
Large population.
Favourable supply/demand balance.
Favourable macro economic outlook.
Lower unit costs on entry.
Below average affordability.
Concerns over corruption.

For further information about investing in property in Hungary, please contact our sales team on 020 7763 7170