On the other hand, while the lack of sales may force some developers to further decrease their asking prices, another price correction may appear when developers will decide to introduce new, less expensive projects to the market.
“As construction costs become lower, newly launched units may offer discounted prices. This may become a necessity as very few buyers may be encouraged to take risks of investing into an early-stage development in the current market situation”, the real estate consultant said in the report.
The last quarter of 2009 noted a low number of dwelling completions at only 895 units. “It is highly probable that 2010 will not bring a significant improvement to the market. Both demand and supply will stabilize at a very low level bringing no reason for developers to start new activities”, Reas said.
Reas is expert adviser in the field of housing projects planning and development in Poland and Romania. Since 1997 Reas has been advising developers, funds, banks, local governments and other institutions in the residential market.
Reas is also a strategic partner of Jones Lang LaSalle in providing advisory services in Poland and Romania.
Last year, 1,300 new apartments were sold in Bucharest, 60% below 2008 level, and 80% below 2007 peak, according to a market research by Colliers International.
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