Loading ...Local real estate developers appeared to be the most affected by the collapse of the Stock Exchange, with their shares having lost more than an average 85% in their values since the beginning of the year, especially on the background of the fears of the investors related to the effects of the international financial crisis on the real estate sector. Nevertheless, the general index of the market, the BET-C index, lost 60% in the same interval.
The market value of the most important three domestic real estate companies listed on the Bucharest Stock Exchange (BVB), was practically swept off by the drops this year, down to less than 80 million euros, as against 590 million euros the value of the total capitalization on the BVB late last year, Ziarul financiar daily reads on October 21.
Nevertheless, Impact Developer & Constructor (IMP) appeared to have lost the most, with the company’s shares having shrunk more than 12 times this year, and with the company’s capitalization having reached down to 21.5 million euros, despite the mid-year growth.
The drops announced by the Romanian developers represent no exception, with most of the companies operating in the real estate sector in Europe having recorded important losses too.
The drops announced by the Romanian developers represent no exception, with most of the companies operating in the real estate sector in Europe having recorded important losses too.
Thus, the shares of the Austrian investment fund Immoest, with an important exposure on the domestic real estate market, recorded a decrease this year by 84% on the Vienna Stock Exchange, while the shares of the Polish real estate developer GTC, operating also in Romania, saw losses of 65% in their value.
Analysts believe the evolution of the shares of the developers listed on the Stock Exchange were first influenced by the international crisis, which manifested in the local real estate markets becoming torpid and also by the lack of liquidities on the international banking market, an obstacle in the development of projects in Romania.
“The depreciation of the national currency (leu) against the euro is to also affect real estate developers, the same as the more restrictive financing norms imposed by the Romanian National Bank (BNR), which entered into force on October 1,” Adrian Danciu, head of the analysis department of Broker Cluj (central Romania) told the abovementioned paper.
A significant part of the population housing loan agreements in euros, following that in the case of an appreciation of the European currency the costs to increase in a quite significant manner, which represents also an obstacle for those who want to buy a house on credit.
According to experts, the most affected are to be the small developers, who focused on such financing via high-cost loans. Nevertheless, such developers who financed their activities from own sources will do better, although their results will not be as good as before.
Analysts also say that, in general, Romanian developers launched themselves in very ambitious projects, which they are not able to support by themselves any further.
Analysts also say that, in general, Romanian developers launched themselves in very ambitious projects, which they are not able to support by themselves any further.
“The banks are reticent to such loans worth 70-80% of the value of the project and became more cautious due to the crisis,” said Marius Muresan, an analysts with the STK financial company. Still, he seemed quite optimistic, showing his belief the crisis will be solved very soon, in no more than a few months, as there still exists a significant demand on the market.
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