Centrul Diplomatic/Diplomatic Center

Centrul de Studii Politice si Diplomatie/ Center for Political Science and Diplomacy

THE LAW ON GIVING IN PAYMENT(COMMISSIONING) WILL BRING NORMALITY IN ROMANIAN REAL ESTATE

 The Law on Giving in Payment is making murky waters  on Romanian real estate market and is creating powerful pro and against camps every day more vocal, but unfortunately less and less based on economical date and more on sentimental reasons.

In order to address this fundamental issue: what will be the impact on commissioning law on real estate market? The Institute of International Relations and Economic Cooperation organized on 29 February 2016, the annual conference dedicated to the housing market in Romania.

THE ROLE OF REAL ESTATE MARKET IS TO PROVIDE HOUSING AND NOT EXUBERANT PROFITS TO SPECULATORS

In the opening remarks of the conference Prof. Dr. Anton Caragea explained the importance of real estate market:

We must comprehend the fundamental truth that : the real estate market is not dedicated to the big business sharks, to the speculators or to hit and run economic actors, but the real aim of this market must be to offer housing to those in need not profit to real estate moguls.

 

Or this is exactly the hitting point of the hammer of the law, the great real estate speculators, who aim at taking profit after profit, that are speculating on housing, they will be the victims, while the persons in search of house for living, for building a family, they will be in advantage.

 

Is normal that the prices will abruptly go down, and this is a perfect solution for the real estate market because the prices must not be dictated by speculators and riff raffs but by the real economy and this is demanding a reduction in prices by 50%. This will exactly the outcome of the Giving in Payment Law: will bring normality on housing market.

  images

The real image of Romanian housing market: old, shabby houses, energy deficient and costly.

On the venue of the conference where brought together: real estate agents, bankers, property experts and evaluators, brokers and real estate funds from Romania and EU and economists.

The debates started with the highlights of the latest evolution`s and drop in prices on real estate market in Romania during 2015, the most prominent bankruptcies in the real estate developers and the factor leading to a continuing devaluation of the market prices for 2016.

2015: THE REAL ESTATE PRICES TOOK A PLUNGE OF 15% 

During last year, according to the figures presented on the conference, the average price reduction was around 15%, as a medium calculation, with highest mark for villas and houses going towards a 25% reductions, one of the most serious drop since the economic crisis hit Romania.

Despite this optimist signs of price reductions, all the experts underlined the fact that: prices are a long way to go before they reach the normal prices range.

 2016 will mark new prices reductions until the real estate will register a 50% decrease from present day levels.

The tendencies on the market are putting the correct price around 200 Euro per square meter, the just price for Romanian market.

A highly interesting statistic proved that: who signed a contract last year to buy a propriety has already lost 20% of his investment.

New significant drops in prices (around 50% of present day marks) are just the tip of the iceberg and will have to continue in the next period, if there is to be a chance for the market to be stabilized and the investment in real estate to become one more time attractive and efficient.

From an initial value of 1.200/1.300 euro per build square meter, the prices have dropped by the year-end, towards 650-450 euro per constructed square meter, but are a long way to go until normal prices, requested by the market, will come back on Romanian real estate.

2016: THE INDEX OF PRICE IS INDICATING A 25% REDUCTION IN PRICES 

The real estate market will continue the downward spiral in 2016, accelerated by the economic crisis and low-income, with the greatest devaluation registered for the rural based property and on secondary or vacation house market and provincial cities where prices will decrease by 80% while the depreciation will rich figures of around 40% to 50% on premium real estate objectives in Bucharest areas.

The prices are expected to fall below 200-250 euro per constructed/ square meter in prime areas of Bucharest real estate.

 imobiliarele sunt in faliment

The housing market prices have one direction: Down and quickly !

The drop in prices is driven by the ongoing banking crisis, the powerful economic crisis, the reduction of incomes, the shrinking in number of banking institutions available to offer real estate loans, the spike in banking interest rates, dramatic decrees in investment, drastic reduction in real income for majority of Romanians, unfavorable economic prognosis, ongoing economic crisis and also decrees in foreign investments and in revenues from Romanian working abroad etc.

To this long list of negative trends we can add the 120.000 new flats, houses and villas that will be placed on the market by the banks in the foreclosure process.

They were expected to flood the market from 2015, but their apparition was bogged down by law complication and lawsuits but eventually they will start emerge from banks portfolios on the market bringing severe corrections to the prices.

This new properties will be presented on the market with reduction`s in prices ranging from 50% to 25% percent from the initial announced price.

 preturiinscadere

The banks presented list of property with starting prices ranging from 15.000 to 20.000 euro for one room flat, to 25.000 euro per two rooms flat and around 35.000 euro for three room flats.

The mansions and villas are sold at pricing ranging from 35-40.000 euro per 200 squared meter’s villas in high luxury areas and as low as 20-30.000 euro in secondary areas.

The prices for land in Bucharest area already dropped with 50% in 2014 and will furthermore decrease with 50% this year, reaching finally the 50 euro per square meter in central areas of Bucharest, a price that will allow re-emergence of developers on the market on the next years.

On the list of economic developments, on the real estate market, that are impacting downwards the prices were highlighted: a drop in population real income by 30% in 2014/2015, this had impacted drastic the number of real estate buyers, banking system is engulfed in crisis and choked by low-commercial value properties; the average real interest for real estate credit is around 20% which is making the cost of real estate credits unsustainable.

We can safely conclude that: taking a real estate loan in this period is the path towards bankruptcy and foreclosure for 90% of the clients.

Borrowing today ! Bankrupt tomorrow! was the bitter joke of the bankers, which confessed that banking system is in a vicious circle, until the prices will reach the 200 euro per square meter mark, until this moment the loan market is blocked.

WE HAVE HOUSES! BUT WE DON’T HAVE BUYERS! 

2016 is presenting a market under siege with offers and with no buyers interested.

This year will enter on the market like a flood: over 50.000 hectares of prime land and a new stock of 3.000 villas and mansions in areas as: Colentina, Bucurestii Noi, Pipera, Baneasa, Damaroaia etc.

This avalanche of real estate`s will be sold on the market at prices below 50.000 euro per property and will push toward collapse the luxury real estate market.

Another interesting factor that emerged from discussion was the fact that: this year the offers are reaching 50% from the asking prices, while the norm on the market was a difference between 10 to 15% but today the gap has go down to at 50% of the initially estimated price.

 CAMERA DE COMERT BUCOVINA

Chief Economist Mihail Raceanu underlined again and again the fundamental truth that: real estate market cannot operate outside the negative climate of Romanian and EU economy.

The real estate market is intricately connected with the decrease of average wage and real income per person and the economy status.

 The price per square meter, in prime real estate areas, cannot be over medium salary value by more than two times.

As in Romania the salary is around 150 euro monthly, the price per square meter cannot exceed more than 300 euro, as a matter of economic sanity.

It a clear axiom of economic sustainability, you are breaking it; you go out of business, concluded Mihail Raceanu.

The market will restart if we will reach the financial comfort zone around 200-300 euro’s per square meter.

This is the hard to swallow truth: who is not cutting rapidly the prices remains excluded from the market.

50% to 60% REDUCTION IN HOUSING AND VILLA MARKET SECTORS. 

We have entered now in the eight year of the housing crisis and we have to logically be prepared for another eight year for dropping prices as normality on the market is the United States expert’s opinion.

Crisis is today economic normality!

The developers in the areas of villas and houses concluded that this area will continued to be severely hit with drastic reduction of prices during 2016.

The main reason is the fact that: economic crisis had dramatically reduced the number of interested players for buying this type of real estate, corroborating this with decreasing rental market and drastic reduction in number of companies interested to rent such large spaces for offices and the growing expenses to maintain such a property, had gone up impressively, all is worsening the perspective for this type of properties.

The new taxes and fiscal obligations are hitting hard on the owners of luxury estates and the maintenance cost are rising rapidly on gas and heating tabs.

This type of properties is the most vulnerable for banking foreclosures and sell on the market at prices below 50.000 euro such villas can help the banks to cut their losses.

During this year areas such as: Mosilor, Pipera, Baneasa, Tunari, still offer the possibility to be sold around 50.000 euro, the rest of the areas of south and east of the capital (Damaroaia, Berceni, Timpuri Noi, Colentina), are completely unfit for marketing and selling because of the inexistence of interested buyers.

  homelessin London

The portrait of housing buyer: bankrupt and on the street!

YOU BUY!  YOU LOOSE!

During 2015 the same order is playing in the real estate market: you bought, you lost!

From the moment that you ink the deal, the real value of your house has gone down by 20% and will continue to dwindle.

Understanding the real estate market evident lessons is a major step: the internal market with a dwindling number of buyers and unpredictable income is blocking any major acquisitions and foreign investors are NOT coming to the market.

Nothing will change until the prices are reaching the 200 euro mark per square meter.

No investment in Romania is possible at current prices of 400-500 euro per square meter as long as similar opportunities are to be found in Austria, Hungary, Greece, Turkey or Bulgaria but at prices below 100 euro.

  In this moment any buyer of Romanian properties will lose big and heavy, concluded the panel of experts present at the conference.

All the hopes are concentrating on the rapid implementation of the New Fiscal Code of Romania that will force by huge taxes and levies the owner to rapidly sale their property or face foreclosures.

Thus will bring the prices to the reality of 200 euro target of real estate market.

The Law of Giving in Payment in marking a step in the right direction towards bringing equilibrium of the real estate market and signaling that the time of housing speculators in rapidly nearing his end.

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February 29, 2016 Posted by | Foreign policy | , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , | Leave a comment

ROMANIA REMAINS INTERESTED IN IRAQ DEVELOPMENT

On 9 June 2015 the taking office, protocol meeting, between Prof. Dr.Anton Caragea, President Director-General of Institute of International Relations and Economic Cooperation and H.E. Hussain Sinjari, Ambassador of Republic of Iraq, had taken place.

Prof. Dr.Anton Caragea express his heart felted congratulation on the occasion of beginning of mandate of H.E. Hussain Sinjari and stated that Iraq was and it will always be considered a strong ally and friend of Romania in the Middle East region and expressing the view that we have all the unmistakable signs of a successful strategic friendship.

Romanian Diplomatic Bulletin

H.E. Hussain Sinjari, Ambassador of Republic of Iraq gives a warm welcoming to Prof.Dr.Anton Caragea, President Director-General of Institute of International Relations and Economic Cooperation.

In his declaration Professor Dr.Anton Caragea had appreciated that between Romanian and Iraq we are witnessing a large area of common interests such as: strong, constant developing and stable economic relations, an open and substantial political dialogue and a common sentiment of brotherhood.

All this elements are destined to forge a good understanding between the two nations.

The Romania-Iraq relationship must be an example of constructing strong relation between Romania and countries of the Middle East.

In the last decade the bilateral dialogue with Iraq was exceptional in amplitude, seriousness and efficacy and this bilateral long term commitment is constitute an obligation for both of the countries to continue building this framework of dialogue and friendship.

H.E. Hussain Sinjari had expressed his appreciation for the encouragement`s offered by Prof.Dr.Anton Caragea and had stated that the vision of a economic, politic and cultural special relationship between Romanian and Iraq is a mutual shared vision.

The dialogue had continued on concrete aspects and analyses of economic, political and cultural bilateral relations and on ways of fostering this dialogue on to the future.

Concrete actions on: creating a Romanian-Iraq Business Council  to promote Iraq continuing development and on economic opportunities, the opening of honorary consuls offices to promote the bilateral relation and amplifying the parliamentary cooperation where also tabled at the meeting.

The amicable discussion marked also the themes of inter-cultural dialogue and religious tolerance and H.E. Ambassador Hussain Sinjari outlined his previous activities at the head of Tolerancy.org, a non-governmental organization destined to promote the values of humanity in today`s world.

The dialogue led the foundations of a successful diplomatic mandate and offered the solutions necessary to foster in the near future the relations between Romanian and Iraq and constitutes a promise to continue a successful direction on Romanian diplomatic action.

June 14, 2015 Posted by | BEST AMBASSADOR TO ROMANIA IN 2013, Blackseanews Agency, Diplomacy, Foreign policy, Informations, Institute of International Relations and Economic Cooperation, International Relation, Iraq, Islam, Mass media, News, Orient, Politics, President Director General of Institute of International Relations and Economic Cooperation, President Dr. Anton Caragea, Profesor Dr. Anton Caragea, Professor Dr. Anton Caragea, UNESCO Heritage List, Universities | , , , , , , , , , , , , , , , , , , | 1 Comment

FEBRUARY 2015: BILATERAL CONSULTATION BETWEEN ROMANIA AND IRAQ

Prof. Dr. Anton Caragea, President Director-General of Institute of International Relations and Economic Cooperation and H.E.Omer Ahmed Karim Berzinji- Ambassador of Iraq to Romania held a round of consultation on February 2, 2015.

Romania-Iraq Consultation

Romania-Iraq: bilateral consultation-a sign of developing relation.

Prof. Dr. Anton Caragea express his heartily congratulation for the activities and profusely results achieved in 2014, in the bilateral relation between Romania and Iraq and highlighted the fact that between Romanian and Iraq we can observe a large area of common interests , designed to forge a good understanding  between the two nations .

The Romania- Iraq relation had already become a model for all the countries in the region and this model must be underlined as the perfect relation between Romania and Middle Eastern countries.

The mandate of H. E. Ambassador Omer Ahmed Karim Berzinji has proven that Romania can have a sustained and perfect relation with the countries in the Middle East, even in this difficult political and strategic environment and I give this example of a perfect bilateral relation to other ambassadors of the area.

H.E.Omer Ahmed Karim Berzinji-BEST AMBASSADOR IN 2013 had expressed his appreciation for the encouragement`s offered by Prof.Dr.Anton Caragea and had stated that the vision of developing and fostering new economic, politic and cultural relations between the two nations is a shared vision.

The consultations had continued on concrete aspects and analyses of economic, political and cultural bilateral relations and on ways of fostering this dialogue on to the future.

 

Especially important was the common analysis of the region problems and evolutions and the shared vision in a Middle East free of terrorism menaces, living in peace and development, a vision that drive`s Iraq and Romania towards cooperation with a mutual goal.

 

The regular consultations between the two officials will foster the relations between Romanian and Iraq and constitutes a model for diplomatic dialogue for all the countries.

February 8, 2015 Posted by | Blackseanews Agency, Diplomacy, Eastern Europe, Economy, Foreign policy, Informations, Institute of International Relations and Economic Cooperation, International Relation, Iraq, Leaders, News, Politics, Romanian economy, Romanian Foreign Policy | , , , , , , , , , , , , , , , , , , | Leave a comment

DAY OF THE FIRST PRESIDENT OF KAZAKHSTAN CELEBRATED IN ROMANIA BY SPECIAL DOCUMENTARY ABOUT PRESIDENT NURSULTAN NAZARBAYEV

On 29 November and 30 November 2014, the Romanian National Television had aired the famous documentary: Leader of the Turkic World, historical recollection of the contributions of Kazakhstan and his first president Nursultan Nazarbayev for promoting Turkic peoples unity, self-awareness and international recognition.

Leader of the Turkish World

The documentary achieved an impressive audience around the country and was watched by more than a million viewers.

After the broadcasting of the documentary, many Romanian personalities, academicians, foreign policy experts, parliamentarians addressed congratulatory messages to the Kazakhstan Embassy in Romania for the DAY OF THE FIRST PRESIDENT-NURSULTAN NAZARBAYEV and for the documentary-LEADER OF THE TURKIC WORLD.

Here are some of the messages of appreciation sent to the Kazakhstan Embassy:

Senator Constantinescu FlorinChairman of Senate Committee of Energy and Transports-Mr.Florin Constantinescu:

I have the pleasure of congratulating the Embassy of Republic of Kazakhstan on the occasion of broadcasting the highly valuable documentary: Leader of the Turkic World, presenting to the Romanian viewers the inspiring and tremendous activity of Kazakhstan President: Nursultan Nazarbayev.

Presenting the all encompassing documentary on the life and achievements of the creator of modern Kazakhstan and the architect of the unity of Turkic peoples on Romanian National Television was also a gesture of Romanian people in recognition of the world value of the activity of President Nazarbayev and a proof of the high esteem that our nation is having for Kazakhstan, build by the exertions of President Nursultan Nazarbayev.


Academician Mircea Constantinescu-webDirector of European Tourism Academy-Academician Mircea Constantinescu
has appreciated the high quality of the historical research involved in making The Leader of the Turkic World.

This documentary is making the viewers to get acquainted with the atmosphere after the fall of the Soviet Union, when Kazakhstan and President Nazarbayev took a leading role in reasserting the Turkic world values and heritage and transformed the former soviet republics in fully fledged members of international community and viable states.

 

Senator Ionel AgrigoroaeiSenator Ionel Agrigoroaei, Secretary of the National Defense Committee of Romania stated that the impressive film:

The Leader of the Turkic World has opened for Romanian public the gates of a interesting and previously unknown world of Turkic peoples and outlined to the general public the image of a inspirational personality: the visionary first president of Kazakhstan: Nursultan Nazarbayev, the lofty leader of the Turkic peoples.

 

The Honor Book at Korean GovernmentProfessor Dr. Anton Caragea, President Director General of Institute of International Relations and Economic Cooperation, had emphasized the significance of National TV Romanian Television broadcasting the documentary on Leader of the Turkic World on the birthday of the First President of Kazakhstan as a perfect sign of appreciation for the historical contribution to the world development, brought about by the President Nursultan Nazarbayev.

The documentary, first time broadcasted at a European television, is a completely and perfect crafted demonstration of the role of a historic personality in changing the world and shaping the destiny of millions of peoples.

The viewers have an unique perspective, constructed with the help of presidents of Kirgizstan, Turkey, diplomats and foreign dignitaries, all who witnessed the enormous contributions of President Nazarbayev.

The documentary is underlying President Nazarbayev contribution in building the modern nation of Kazakhstan, in bringing his country and people on the world limelight and offering vital contributions to the world security by relinquish nuclear weapons and being a major security supplier for the entire region.

If today the Turkic world has reasserted his presence in the world and regain his self consciences on the legacy of Al Farabi, Abay, Ahmed Hogea Yassaui etc. this is due in no small part to the contribution of President Nursultan Nazarbayev, who succeed to put Kazakhstan on the world rostrum and with acumen and steersman-ship had created an undying legacy, the legacy of Kultegin, who lives on and the documentary, Leader of the Turkic World , is capturing this story to the fullest.

December 1, 2014 Posted by | Diplomacy, Eastern Europe, Economy, European Council on International Relations, Informations, Institute of International Relations and Economic Cooperation, Institutul de Relatii Internationale si Cooperare Economica, International Relation, Kazakhstan, Mass media, News, Nursultan Nazarbayev, Politics, President Director General of Institute of International Relations and Economic Cooperation, President Nursultan Nazarbayev, Romanian Foreign Policy, Universities | , , , , , , , , , , , , , , , , , | Leave a comment

ROMANIAN PARLIAMENT IS HONORING THE STRATEGIC FRIENDSHIP WITH KAZAKHSTAN

Romanian Parliament is increasing his presence in the country’s foreign policy and is throwing his wait in supporting the promotion of Romania’s strategic friendships.

The bilateral relation with Kazakhstan is of tremendous significance for fostering our country’s relations with Central Asia and in promoting the concept of the New Silk Road in XXI century, a road that will connect the emerging markets of Asia with the European developed economies.

In order to underline this impressive significance of Romania-Kazakhstan cooperation, under the high patronage of Institute of International Relations and Economic Cooperation, the key officials of Romanian Parliament had offered a perfect welcoming to the new Kazakhstan ambassador in our country HE. Daulet Batrashev.

Senator Florin Constantinescu, Preşedinte al Comisiei pentru Transporturi şi Energie din Senatul României, Profesor Doctor Anton Caragea, Director IRICE şi Ambasadorul Republicii Kazahstan în România- E.S. Domnul Daulet -web

H.E. Daulet Batrashev-Kazakhstan Ambassador receives the Romanian Senate decoration from Chairman-Senator Florin Constantinescu.

 

The Chairman of Romanian Senate Energy and Transport Committee, Vice-President-Florin Constantinescu emphasized the economic significance of the Kazakhstan presence, as the key player on Romanian energy market, by the investments projects of KazMunayGaz.

Today’s Kazakhstan is the strategic investor in the energy sector and the second foreign investor in Romania’s economy.

Ambassador Daulet Batrashev presented his country farsighted economic strategy-Nurly Zhol, outlined by President Nursultan Nazarbayev and emphasized the role Romania can play as the hub of energy supplies coming from Kazakhstan and as the terminal point of the energy route, connecting Kazakhstan and Europe and informed the Senate leader of the acquisition by Kazakhstani side of the Georgian port of Batumi, a positive development in increasing the bilateral trade between the two countries.

In the end of the meeting, Mr. Florin Constantinescu- Chairman of Romanian Senate Energy and Transport Committee has officially invited the leaders of Kazakhstan parliament to attend the Silk Road Conference to be held with the support of Professor Dr. Anton Caragea, President Director-General of Institute of International Relations and Economic Cooperation.

As a sign of the Romanian Parliament commitment to develop the relation with Kazakhstan, Senator Florin Constantinescu bestow upon H.E. Kazakhstan Ambassador Daulet Batrashev the Romanian Senate Medal and awarded the same medal to Professor Dr. Anton Caragea, President Director-General of Institute of International Relations and Economic Cooperation.

Senatorul Marcel Dumitru Bujor-Preşedintele Comisiei pentru Românii de Pretutindeni, Ambasador-ul Kazahstanului E.S. Daulet Batrashev şi Profesor Doctor Anton Caragea, Director IRICE-web

Senator Marcel Dumitru Bujor entrust the official invitation for a high level Kazakhstan parliamentary delegation. 

 

Kazakhstan Ambassador was received afterwards by the Chairman of Romanians Abroad and Foreign Diplomacy Mr. Marcel Dumitru Bujor.

He clearly marked the Romanian gratitude for the Kazakhstan role in supporting the strategic relationship with Romania and for investing in our country economy and especially for creating in Kazakhstan a model society of development and inclusiveness, in full accordance with the human rights standards of today.

Ambassador Daulet Batrashev presented the updated situation of the Romanian minority leaving in Kazakhstan and topping 26.000 members and enjoying constitutional rights and law protection in developing and preserving their culture and traditions.

The Ambassador Daulet Batrashev also presented the experience of the Assembly of People’s of Kazakhstan, a perfect designed institution to fulfill the desires of all minorities, leaving in harmony on the territory of Kazakhstan.

In the end of the meeting, Chairman Marcel Bujor had offered to H.E. Ambassador Daulet Batrashev the 150 years of Romanian Senate Plaque and offered another commemorative plaque to Professor Dr. Anton Caragea, President Director General of Institute of International Relations and Economic Cooperation.

Ambassador Daulet Batrashev and Senator Ionel Agrigoroaei

H.E. Ambassador Daulet Batrashev received with full pomp at the Romanian Parliament: a sign of perfect friendship.

H.E. Ambassador Daulet Batrashev was afterwards received by Vice-Leader of Romanian Chamber of Deputies Mrs. Liliana Ciobanu and by Senator Ionel Agrigoroaei from National Defense Committee and from Economic, Industry and Services Committee of the Parliament.

In all their declarations the Parliament leaders emphasized the importance of the Romanian-Kazakhstan relations and the seriousness that Romanian political and economic leadership is investing in the strategic friendship between the two countries.

Professor Dr. Anton Caragea, President Director-General of Institute of International Relations and Economic Cooperation had concluded the visit to the Parliament by appreciating that: the impressive welcoming staged by the Senate and Chamber of Deputies for Ambassador Daulet Batrashev is self explanatory proof of the high esteem that Kazakhstan is enjoying in the Romanian society.

 No other ambassador has being welcomed in such a manner, befitting to a strategic friendship, the friendship between Romania and Kazakhstan.

November 30, 2014 Posted by | Eastern Europe, Economy, Foreign policy, Informations, Institute of International Relations and Economic Cooperation, International Relation, Kazakhstan, Mass media, News, Nursultan Nazarbayev, President Nursultan Nazarbayev, Romanian Foreign Policy, SENATOR FLORIN CONSTANTINESCU | , , , , , , , , , , , , , | 2 Comments