The Bucharest real estate market is facing an unprecedented impasse with major economic, social and environmental consequences. In addition, no other PUG-based public investment (i.e. school and hospital renovation works, infrastructure works, city heating system upgrade works, passages, etc.) will not be possible in Bucharest, warns the Association of Real Estate Investors in Romania (AREI).
“Once this blockage occurs, investors will migrate to the outlying towns of Ilfov county, with which Bucharest already competes in the housing segment for middle and low incomes. This will further increase traffic to and from the capital – driving to work and driving children to school in Bucharest, will increase the need for investment in transport infrastructure, while increasing the level of pollution in the city. With all this happening while neither public investments nor infrastructure projects will be able to move forward, being themselves victims of the same canceled PUG”, underlines Antoanela Comşa, President of the Board of Directors of the Association of Real Estate Investors (AREI).
She continues: “The first affected by this situation are the final beneficiaries, namely the buyers of housing, the tenants of offices and shops. This complete stalemate in real estate investment in Bucharest comes at a time when we are already facing a significant housing deficit in the capital, in the face of sustained demand, and when the pace of construction works has already slowed down in the face of current economic challenges. The current urban planning context, the absence of neighborhood PUZ, now followed by a decision to cancel the PUG, will further limit the supply of new living spaces. People will thus face rising housing prices and rents, in extremely difficult economic times, and the quality of life will also suffer, as an older housing stock, with buildings with a high carbon footprint, will remain on the market “.
At the same time, local public authorities in Bucharest will be deprived of the significant revenues directly generated by real estate, residential, office and commercial developments, all of which are so important for the economic development of the city of Bucharest. Bucharest district town halls collect 0.5% of the investment value for which a building permit is issued.
In addition, the tax collected by the National Construction Inspectorate, representing 0.6% of the investment value linked to each real estate promotion, will be lost.
“This money could be used to hire more construction inspectors, given that we have a significant deficit here, which affects an activity essential for the quality of the projects and the safety of the final beneficiaries, namely inspections on construction sites. construction in Bucharest and throughout the country,” continues the Chairman of the Board of AREI. “It is also important to mention the additional income normally generated by a functioning real estate market, such as property taxes on buildings or land that is also collected by borough town halls, or other taxes that go to the national budget, such as labor taxes or contributions to ANAF The consequences will also be felt by other industries related, such as producers and suppliers in our supply chain (interior design, furniture, electronics, etc.)”.
New real estate projects include the development of green areas or the construction of kindergartens, as well as elements aimed at improving the infrastructure of the city – elements which, taken together, generate added value and improve the level and quality of life in Bucharest.
AREI considers that the cancellation by the court of the District Coordinating PUZs and the General Urban Plan of Bucharest, in the midst of a major global crisis announced for the future, could have an irreparable impact on the real estate sector and economic and social development of the city. The association hopes that the local authorities will take urgent measures to unblock the situation, so that people living or working in Bucharest do not pay the price for the absence of an urban strategy.