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Professor Mircea Coșea explained to DC News why people were queuing to book apartments in a residential complex in Bucharest, even though there is an unprecedented housing crisis.
Professor Mircea Coșea said what would be the explanations for a phenomenon that occurred in the capital’s real estate market. More precisely, the queues formed in a residential complex in Bucharest, people waiting to reserve apartments in the conditions in which the block barely has a high floor of … 12. Read the NEWS HERE
The explanations of Professor Coșea, economic analyst, about this real estate ‘phenomenon’
DC News: Are Romanians afraid that it will happen like in 1990 when money was devalued and now they are waiting for the same to happen? Why keep buying apartments with such an appetite? Why don’t the prices go down?
“From my point of view, it is a fear that more difficult and complicated things will happen. And for this reason, people are trying to invest their money in something stable. Of course, there is also the fear that the euro will rise against the leu because all these apartments are offered in lei, but in fact, they are priced in euros. There is probably also an element of an alleged housing crisis. So people are getting ready to invest their money in something. ‘ Coșea said.
‘Romanians should be more careful’
“But in the existing conditions, Romanians should be more careful because it is not known how the economic situation will evolve. I suspect that much of the money they invest is obtained through loans. There is also fear here because it is an almost certain possibility that banks will enter a period of non-performing loans. In other words, there will be long delays in the payment of loans because many no longer have money to pay. Therefore, the banks, to be sure, will tighten the credit conditions. It will be increasingly difficult to grant loans to individuals. ‘ Coşea pointed out.
“We continue in a patriarchal-communist economy”
‘All of these things, together, can lead to an invasion to buy apartments. From my point of view, this also means proof of the underdevelopment of the market economy in Romania. We are still in a patriarchal-communist economy in which wealth consists of the house, the car, the television. In other countries there is the possibility of investing in bank stocks, in the stock market, in elements of culture, art, even in jewelry and gold. I suspect that there will be a period, not too distant, in which we will have ‘queues’ to buy land. And there are people who are ready to spend on these investments that they find long-lasting and valuable.. said Cosea.
‘A liquidity crisis will hit Romania in the coming months’
“The problem is related to a liquidity crisis that will hit Romania in the coming months. So this impulse to buy apartments, cars, will decrease because there are 500,000-600,000 Romanians who will remain in an almost permanent unemployment because the technical unemployment cannot be paid indefinitely. These people will live off social assistance in one form or another, and their spending will be focused on what is strictly necessary. ‘ concluded Professor Mircea Coșea, for DC News.
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