Residential property demand pushing prices up in Bucharest
Residential property construction in Romania experienced a boom as the country prepared for accession to the EU, with the level of homebuilding rising 19% in the final quarter of 2006.
The demand for housing has continued into this quarter, but despite the increased level of building, supply constraints are still pushing prices upwards.
According to the National Statistics Institute, 17,448 apartments and houses were completed in Romania last quarter, up from 14,682 in the same period in 2005, with 82% being built through private investment, the Budapest Business Journal reports.
However, a labour shortage due to post-communist migration means there are not enough construction workers to meet the sustained high level of demand for residential property.
Figures quoted in the newspaper Niarul Financiar show that supply constraints are having an effect on price inflation, especially in the capital. Apartment prices in Bucharest showed a monthly rise of 6% from January to February, now costing Ôé¼1,375 (~£935) per m2.
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