There are 18 residential buildings in construction in Primăverii, Aviatorilor-Kiseleff and Dorobanţi-Capitale; the three neighborhoods are considered to be the epitome of residential luxury. By the end of the year or in 2015, depending on when they will be completed, these blocks will provide approximately 200 luxury apartments. Other four buildings of luxury homes have been completed in these areas this year. The fact that investors have become once again interested in luxury homes is clear, especially if we consider that in 2012 and 2013 only eight luxury blocks of flats have been built in the same areas, according to a study by HomeFinders.ro, a real estate site. Each square meter of dwelling size costs 1,400 Euros, making the investment in the 22 blocks of flats completed this year or still in construction amount to approximately 35-40 million Euros.
The most attractive area for developers is Primăverii, where there are 11 buildings, already or nearly completed. Kiseleff – Aviatorilor comes next, with a total of nine projects, followed by Dorobanţi – Capitale, where a single project has been completed this year, with another one scheduled to be completed the next one. Thus, Primăverii neighborhood comes first with 49 new buildings constructed after 2000, while Kiseleff – Aviatorilor has 47 such projects and Dorobanţi – Capitale only 22.
‘2014 has begun with a renewed interest from developers in luxury projects. It comes after a long period of lapse, in which no new luxury blocks of flats have been constructed and only existing luxury homes have been bought or sold on the market. We’re also witnessing a higher demand of land in top locations, which only enforces the idea that the luxury market is recovering and that the next period will only prove to be more dynamic,’ said Mihaela Pană, head of the residential department of DTZ Echinox, the company which managed the selling of a historical monument villa at the price of 4 million Euros, the most expensive real estate transaction this year.
At the moment, there are approximately 8,000 new flats on the market in Bucharest, including those constructed in the last years or older ones which are on being sold again. According to the calculations of HomeFinders.ro, luxury homes account for less than 5% of the new flats market; it estimates that under 400 such flats are available for sale in the Primăverii, Kiseleff-Aviatorilor and Dorobanţi-Capitale areas. At the average price of 200,000 Euros a flat, the total value of the luxury homes market comes to around 80 million Euros. Even if this means the market’s value has been cut to half since the economic crisis, it is still attractive for any real estate developer.
But it also means that, because of the low volume of transactions, to recover the money one has invested is a slower process than before the crisis. According to HomeFinders.ro, only 50 luxury homes have been sold since the beginning of the last year and until August 2014, while in 2007 alone there have been around 200 such transactions.
New projects, new prices
In the last six years, the prices have dropped by approximately 40% in the case of luxury homes, from an average price of 4,000 Euros/ m2 to 2,500/ m2 today.
‘The average price of a luxury flat is between 3,000 Euros/ m2 of dwelling size in top areas - Primăverii, Aviatorilor, Kiseleff – and 2,000 Euros/ m2 in the Dorobanţi area. We have in our portfolio flats in the Herăstrău area that cost between 3,000 Euros/m2 (with park view) and 1,800 Euros/m2 in the latest luxury project available: 49 Gafencu,’ says Andreea Comşa, managing director at Premier Estate. The block of flats named 49 Gafencu, built by Ciprian and Cristina Anghel, who have built over 100 luxury flats in Bucharest, will provide a number of 110 apartments in the first semester of 2016, at the total cost of 30 million Euros. Prices range from 139,000 Euros for a two-room flat to 700,000 Euros, VAT included, for an apartment at the eighth floor of the residential complex.
Another six floor block of flats on the Sfinţii Voievozi street in downtown Bucharest will be completed in March 2015. Israelis Moshe Turgeman and Tomer Barhom, who have constructed the commercial center Euromall Piteşti, have invested 6 million Euros in the 36 luxury flats of the Vernescu Residence project.