In an article published by Profit.ro, Pavel Kodzik, Chairman of the Board of RRG Real Estate Group, analyzes the impact of the new legislation on Romania’s residential real estate market. According to him, while the law introduces a number of necessary measures to protect buyers, it also changes the traditional financing model used for residential development projects.
Key Takeaways
Greater Transparency for Buyers
The requirement for apartment pre-registration eliminates the risk of non-compliant practices and provides greater clarity throughout the purchasing process. At the same time, it helps strengthen confidence in the residential market and gives buyers a better understanding of the product they are acquiring.
Project Financing Becomes More Expensive
Restrictions on the flexibility of using advance payments require developers to rely more heavily on bank financing. This may generate additional financing costs which, over time, could be reflected in the final price of residential properties.
Predictability Is Essential
Residential projects are planned and financed over the long term. For this reason, major legislative changes require adequate transition periods, allowing projects already under development, as well as existing financing structures, to adapt to the new requirements.
Buyer Protection and Market Development Must Go Hand in Hand
A healthy residential market requires both effective buyer protection mechanisms and stable, predictable conditions for investment and development. Striking the right balance between these two objectives is one of the key challenges of the new legislative framework.
“The real challenge is not choosing between consumer protection and project financing. The challenge is finding a balance that allows both objectives to be achieved.”
“A healthy residential market needs both strong buyer protection mechanisms and stable, predictable conditions for those who build homes.”
The full article can be read on Profit.ro.
