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REAL ESTATE MARKET REPORT

« 2009 - 2010 »

The Mervani Real Estate Agency analyzes and manages a customer database comprising more than 2000 vendors, which can be categorized as follows:

  • 2500 Estates (1700 as private homes and 700 in condominiums);
  • 300 Apartments and studios with a total area of 23.000 sqm and worth 23.5 million euro;
  • 700 Residential apartments and studios in condominiums with a total area of 35.000 sqm and worth 31.5 million euros;
  • 750 Lands in town, feasible for construction, with an area of 2.200.000 sqm and a value of 115 million euros;
  • 450 Houses & Villas with an area of 110.000 sqm, 360.000 sqm of land and worth a total of 105 million euros;
  • 60 Commercial, industrial and travel/tourism spaces with an area of 40.000 sqm, 50.000 sqm of land and amounting to 52 million euros;
  • 140 Estates (apartments, houses, land) offered for long term or short term rental;

Basically, Mervani manages:

  • 2.6 million sqm of land;
  • 210,000 sqm of built up areas;
  • 2500 Estates amounting to 330 million euros;

I. PRAHOVA VALLEY REAL ESTATE MARKET

MERVANI's database was completely updated in June 2010 and contains 1688 to 1563 offers for sale and 125 rental locations. Available in the 21 cities of Prahova and Brasov, our offer covers: Sinaia, Campina, Busteni, Breaza, Comarnic, Predeal, Cornu, Brebu, Azuga, Banesti, Provita, Poiana Campina, Doftana Valley, Telega, Sotrile, Bran, Urleta, Mislea, Rasnov, Tohanu Nou and the DN1 area.

Referring only to the offerings for sale, they are divided into four categories:

  1. Apartments & Studios (297 offers);
  2. Houses & Villas (450 offers);
  3. Commercial Spaces (59 offers);
  4. Built-Land & Outfield (757 offers)

Following the analysis, the results show a share of 48.43% for lands, followed by a share of 28.79% for houses/villas, 19.00% for apartments/studios and 3.77% for commercial, industry and travel/tourism spaces.

If we classify the offers by city, the results show a share of 16.51% for Sinaia, 16.06% for Campina, 13.31% for Busteni and 12.67% for Breaza. The other cities occupy between 1% and 7%.


  • Comarnic - 7.61%
  • Predeal - 7.17%
  • Cornu - 5.18%
  • Brebu - 3.97%
  • Azuga - 3.52%
  • Banesti - 3.01%
  • Provita - 2.69%
  • Poiana Campina - 2.18%
  • Doftana Valley - 1.86%
  • Telega - 1.34%
  • Zone DN1 - 0.96%
  • Sotrile - 0.45%
  • Bran - 0.38%
  • Urleta - 0.38%
  • Mislea - 0.32%
  • RÔsnov - 0.26%
  • Tohanu Nou- 0.19%

The table below indicates the number of offers spread across cities and categories of estates:

The table above highlights the fact that most apartments (36%), residential apartments (43.84%) and studios (46.43%) are found in Sinaia, most homes (22.49%) are in Campina, most villas (29.35%) and commercial spaces (30.51%) are in Busteni, built-up land is mostly found in Campina and Breaza (14.63%, 13.78% respectively) and Outfields in zone DN1 (28.26%) and Banesti (21.74%).

By comparing the period "June 2008 - 2009" with "June 2009 - 2010", we noticed a decline in the number offers with about 11%. Analyzed by category and compared with the previous year, we noticed a growing percentage of built land (from 46% to 48%) and a stagnation in the number of offers for houses & villas to 29%. Commercial, industrial and travel/tourism spaces saw only a very small drop of 1% over the previous year while apartments and studios remained unchanged at 19%. In a comparative analysis, in terms of distribution of offers by city, we noticed a small increase in the percentage held by offers in Sinaia (from 15.58% in 2009 to 17% in 2010) while other cities have dropped : Campina from 17.06% to 16.06%, Predeal from 7.73% to 7.17%, Cornu from 5.23% to 5.18% and the most significant slowing in Azuga from 4.15% to 3.52%.



<<<<< Below we present a description of categories of buildings associated with prices analyzed by location, area and other important characteristics. >>>>>


II. PRICE ANALYSIS BY CATEGORY


1. Apartments

If we want to identify a standard for apartments in Prahova Valley, we can take into account the average results and sum up to the following situation:

A 2 room apartment with a built area of 65 sqm has a price tag of 70,232 euros, respectively 1.108 euro/sqm.

After analyzing 21 cities, we noticed that 7 of them show a fluctuation of 650 euros/sqm with Predeal showing the highest price tag and Poiana Campina showing the lowest price tag. Analized by city, the situation is as follows:

It's important to know that the analysis covers apartments built between 1960 and 1990 and most of them have various improvements like: heating, windows, insulation, tiles and parquet. The result is an average price for the sum asked by vendors in relation to the built area of the apartment. In the case of apartments, the price can and may be influenced negatively or positively depending on the floor where it's located, the location of the building, parking spaces available, the degree of care for common areas, neighbors, landscape view from balconies and windows and utilities available in the area.


2. Studios

The standard offer for studios shows us the following situation:

A Studio with a camera and a built area of 34 sqm is available at 39.994 euros, 1185 euro/sqm respectively.

Only five cities have studios and the price fluctuates between 993 euros/sqm and 1410 euros/sqm. Analyzed by city, the situation is as follows:

Compared to apartments, the studio's high price is justified by the extremely limited offer and the high demand on this category of buildings. The algorithm for calculating the price and its influence factors are identical to those of the apartments, as shown above.

When it comes to studios and apartments older than 2000, we noticed a downward trend in terms of demand and implying a trend of continuous decline of property prices in this category. There is still a pretty generous offer base for apartments and studios in new residential projects, developed both in the top of the Prahova Valley and in the south area (where developers showed interest but investment is lower).

An analytic situation of average prices for this category of buildings, regarding new residential projects, has not been done due to the the major variation in prices from time to time. This is mainly caused by the special offers promoted by all developers who are starting to negotiate the price and add massive additional benefits (car, furniture, vacations, etc.).


3. Apartments in villas

Apartments in villas is a separate category in the Prahova Valley real estate and they have the following standard:

An apartment in a house or villa with a built area of 139 sqm and 192 sqm of land has a price of 94.941 euros, respectively 802 euros/sqm.

Only 8 out of 21 cities have a significant presence of apartments in villas, mainly in the towns of Sinaia and Busteni. The remaining offers are found in smaller numbers as follows:

The price result for apartments in villas is greatly influenced by the age of the house where they are located, the number of apartments in the building, the type of access to the apartment, neighborhood, type and quality of construction, utilities and existing facilities.

The above result comprises only apartments in older buildings as the supply of such housing types in new constructions is fairly limited and could not be assessed.

The demand for this type of property is increasing which implies a moderation of price cuts and should lead to an increased number of developers interested in this category of estates.


4. Houses

An important category of estates in Prahova Valley is that of houses and cottages within which we can identify the following standard:

A house or villa with 6 rooms, with a usable area of 239 sqm and 922 sqm of land has a price of 186.537 euros, respectively 827 euros/sqm.

The situation presented in the table above reveals an average price without taking into account the land value. Only seven cities have offers that exceed the land average of 1000 sqm, while the rest have an average that go below 500 sqm.

Depending on the value of the land and by taking into account the average price per city we can identify the price per sqm for the built area. An estimate could be as follows:

By looking at the above table, we can see an overall average difference of 30% between the average price/sqm (including the related land) and the average price without the land value. Thus, if the average price in Predeal is 1230 euros/sqm, after we eliminate the land value we get an average of 863 euros/sqm.

If we take into account and analyze just the land area we can observe that Comarnic and Provita have an average of 1400 sqm, followed by Breaza, Poiana Campina, Telega, Sotrile and Mislea with over 1000 sqm. The cities with the lowest average for the land area are in the upper area of the Prahova Valley, Azuga having 314 sqm, Sinaia with 407 sqm, Busteni with 482 sqm and Predeal with 598 sqm.

The value of the land (obtained from its surface) may an probably will influence the average price. For example we can see that, if the first table (which included the land value) the result was an average price of 1216 euros/sqm in Busteni, if we exclude the land value the price decreases by 25% to 906 euros/sqm as the average area of land is among the lowest compared to all other localities.

Along Predeal and Busteni, Sinaia and Azuga have the highest average price, after excluding land (over 800 euros/sqm).

The lowest price can be found Mislea (259 euros/sqm), Telega (344 euro/sqm), Banesti (366 euros/sqm), Poiana Campina (475 euros/sqm) and Comarnic (483 euros/sqm). The cities that fit the average price are Brebu, Provita, Bran, Campina, Breaza, Sotrile and Cornu.

17 out of 21 cities have houses for sale or rent and out of 450 offers we noticed a high percent in Busteni (18%), Campina (15%), Breaza (17% ) and Sinaia (10%) while smaller towns like Mislea, Bran and Sotrile have a percentage of less than 1%.

Regarding the number of rooms we noticed a general average of 6 rooms in Breaza, Predeal and Sotrile, 5 bedrooms in Azuga, Banesti, Campina, Comarnic, Mislea and Poiana Campina, 4 rooms in Cornu, Provita, Telega and Doftana Valley. A higher average number of rooms was identified in Sinaia and Busteni (7) and Bran (11).

In terms of built surface, this category has an average of 213 sqm. The largest areas were found in Predeal (316 sqm), Busteni (288 sqm), Sinaia (287 sqm) and Breaza (262 sqm). Between 200 sqm to 250 sqm we have Bran, Comarnic, Banesti and Campina, while houses and cottages in Telega have 106 sqm, Poiana Campina has 135 sqm, Brebu has 147 sqm, Doftana Valley has 149 sqm and Sotrile has 178mp.


5. Commercial Spaces

In this category we took into account all categories of commercial and industrial spaces (factories, plants, etc.), agricultural spaces (halls, warehouses, barns) and tourism spaces (hotels, hostels, restaurants, etc.). The standard for units for this type of property is represented by the following algorithm and is the result of the average value calculated for each category:

A commercial space with 11 rooms, a usable area of 572 sqm and 812 sqm of land has a price of 600.496 euros (921 euros/sqm) out of which 75.065 euros (99 euros/sqm) is the value of land and 525 431 euro (863 euros/sqm) represents the value of the building.

In the table below we present the same analysis, but assigned to each location:

This category is not too widespread in Prahova Valley and out of 21 cities, only 11 have such estates. Thus, out of 59 estates, 30% are found in Busteni, 22% in Predeal, 15% in Sinaia, 11% in Campina, 6% in Breaza and 3% in Azuga while Banesti, Bran, Comarnic, Cornu and Poiana Campina have only a little over 1%.

In terms of average prices, the results are quite different between cities. In Banesti, Comarnic and Breaza we notice an average price below 500 euros/sqm while the towns of Busteni, Sinaia, Predeal, Azuga and Campina have an average price above 1200 euros/sqm.

The land associated with these spaces has an average of ~800 sqm. In Campina, Azuga, Sinaia, Bran and Comarnic we noticed an average of less than 800 sqm while other cities like Breaza and Banesti have average of over 1200 sqm.

Unlike the previous category (houses), commercial spaces show an increase in price/sqm if we eliminate land value. In Campina, for example, the initial result is an average price of 1235 euros/sqm and after the removal of land prices it reached 1498 euros/sqm. A similar situation is present in the case of Azuga where growth is lower, that is, from 1235 euros/sqm to 1249 euros/sqm.


6. Lands In-Town

Perhaps the most important category of Prahova Valley, land in town, it represents the largest number of estates in our agency. A standard in this category could be as follows:

Land with an area of 3577 sqm and an opening of 32 m has a street price of 156,057 euros, respectively 65 euros/sqm.

If we analyze the supply of land, we notice that this is the only category that is present in all 21 cities and has a high percentage in Campina (14.63%) and Breaza (13.78%), 12.10% in Comarnic, 11.95% in Sinaia and 10.13% in Busteni. Predeal, Brebu, Banesti and Provita have between 3% and 10% while Rasnov, Sotrile, Urleta, Mislea, Bran and Tohanu Nou have less than 1%.

In terms of surface average results, we noticed an average of 1000 sqm to 2000 sqm in 4 cities (Predeal, Brebu, Doftana Valley and Azuga), between 2000 sqm and 3000 sqm in 10 cities (Cornu, Banesti, Breaza, Comarnic, Busteni, Telega, Provita, Mislea, Sinaia and Sotrile) and over 3000 sqm in 7 cities (Campina, Bran, Poiana Campina, Urleta, Tohanu Nou, Rasnov and the DN1 area). We also noticed that the average opening for lands is 32 m, showing a variation of 10 m between some cities (Brebu and Azuga - 20 m, Tohanu Nou and Busteni - 40 m).

If we relate to the average price of 65 euros/sqm, the highest land prices are in Sinaia, Busteni, Azuga and Predeal with 100 euros/sqm while most towns have an average price below 50 euros/sqm.


7. Land Out-Town

The previous category includes outfield lands but with a smaller search area.

Land with an area of 9.732 sqm and an opening of 51 m has a street price of 210,998 euros and 21 euros/sqm.


III. COMPARATIVE ANALYSIS

In this review we tried to make a market assessment for each category divided into three, evolutionary different, annual periods considering two distinct areas in Prahova Valley, the South zone (Campina, Breaza, Cornu, etc.) and North zone (Sinaia, Busteni, Azuga Predeal, etc.). The three periods are 2003 - 2005, 2006 - 2008 and 2009 - 2010, each time with a different feature and by considering the dynamics of the real estate market nationally and locally. In the table below you can see the evolution of average prices/category in 3 periods:

If we analyze the information presented above, we'll notice that, between the first and second period, apartment average prices have increased by 8%, by over 10% for studios, 6% for houses & villas and 7% for land. An interesting phenomenon occurs in the commercial category for zone 2 where we noticed a decrease of 25%, explained by the low number of estates.

Regarding the period after 2008, we noticed an overall average decline for all categories of buildings. Thus, apartments dropped by 16%, studios with over 19%, houses and villas with only 2%, lands by 7% and the commercial spaces category continues its decline with over 3%.

Regarding the sale price of properties, the real estate market prices are decreasing but stabilizing. Beside the apartments and studios which show a downward trend, the houses and villas have entered a period of stability. The lands are permanently strengthening their position as the most popular category and the prices are fluctuating based on seasonal demand. When it comes to commercial spaces, the number of offers is growing, resulting in lower prices as most owners have several commercial loan contracts in progress and they're pressed by time to sell or rent.

A key issue, highlighted in the last period, in terms of trading for all types of buildings, is the negotiating index that appears in the moments prior to signing contracts. This index rose from 5%-6% (2008, 2007, 2006) to ~15% of the requested price for each offer.


IV. ADDITIONAL SPECIFICATIONS

  • The database was updated in all respects (price, technical details, upgrades, estate improvements, estate degradation, etc.) in June 2010;
  • All estate were gathered between August 2006 and June 2010, the oldest offer was registered in August 14, 2006 and the latest on June 14, 2010;
  • Between 2006 and 2010, our offers were viewed a total of 2.9 million times (an average of 3 views / details / day);
  • The most viewed offers are: a house of Busteni (X0DNX1559) with an average of 23 visits per day (over 13,000 views in total), followed by a house in Sinaia (X0DNX1559) with an average of 22 visits and a house Breaza (X0DNX1AF7) with 20 visits per day;
  • By analyzing the requests made directly on the site for each offer (this system is relatively new) we noticed the largest number of applications for a house in Cornu (X0DN1079) with 19 direct requests, a piece of land in Busteni (X0DN307H ) with 10 applications and a house in Doftana Valley (X0DNX15DA) with 9 queries;
  • An average offer may be considered as follows: Taken a year and a half ago, has received about 2,000 views (by an average of three visits per day) and has an average price of 190,000 euros.




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