Bucharest
As you fly into Bucharest the thing that is most noticeable is the sheer quantity of building that is going on. All around the outskirts of the city are factories being built. In the north of the city it seems as if half the area is being redeveloped. As you come into Baneasa airport you swoop down past miles and miles of building sites.
One thing is for sure; the joint is jumping. Property prices have sky-rocketed over the past seven years in the northern suburbs. However, I am told by the locals that it is almost impossible to buy something nice. Everything that is being built has already been sold. The market is obviously still heading up at a great rate of knots.
I foresee mega problems ahead however. The transport system in the city is a mess. There is a small underground rail system in the city centre. There are trams, trolleybuses, large buses, and little jitneys, all trying to get around. Everyone drives along the tramlines so you dont get anywhere quicker by tram.
Getting to work takes hours. Getting trucks around the city is a nightmare. This whole system of logistics is close to complete collapse. Unfortunately the building is going on, and the road improvements aren't there. What Bucharest needs desperately, and fast, is a proper dual carriageway ring-road. It also needs a better zoning system, with proper road access to the factories, and warehouses.
Quality of life in this city is set to deteriorate over the next five years. By then, with some careful planning, and a lot of euro-funding things might start to improve, but at the moment it all looks a total mess.
The latest thinking is to invest in the south of the city, beyond the factory belt that clusters along the southern ring road. I have to admit I dont like the place at all, and that is colouring my professional views, but on the other hand, I cant see how the place cant continue to expand radically, and I also cant see how wages wont rise, and therefore people's ability to buy more expensive housing rise too.
The mass housing estates are truly appalling. They look as if they are held together with hope and sheer obstinacy. Most of them will have to come down sooner rather than later, and those folks are going to need alternative housing.
I wouldn't live there if you paid me, but two and a half million people do already live there, and as the move towards capitalism grows so that number will swell.
At the moment the country is largely agricultural in outlook.
Most farming is done by hand. There are folks out in the fields looking
after the odd cow, watching goats, cutting grass with scythes, moving
goods with donkeys, working strips of land with mattocks. With
mechanisation, which cant be that far away, all this work is going to
disappear. Most farming folks are going to be without a job, and many
of them will migrate to the cities, where they will need housing.
It is time to buy into the major cities. Prices are going to continue up for the next decade. Prices in the country will probably decline over that period.
I spoke with the head waiter in a large hotel. He claimed to be earning €400 a month, that's not a lot more than £50 a week. Wages have a long way to go to rise to half what people get in western Europe. That means there is a long way for house prices to go in the future.
Probably the best way to invest in this city is in new, reasonably up-market developments for commuters. You will undoubtedly make money. What I am doing is investing in land, on the assumption that I am in for a small investment with great leverage.
Look at it this way. You buy a house with a 70% mortgage. You are getting good leverage, because only 30% of your own money is in an appreciating asset, yet you get the appreciation on the whole value of the asset. How much better to buy just the land with a 70% mortgage. Your mortgage payments are considerably less, and it is the land that is appreciating more than any building that may be on it. Okay, in ten years time the house may cost twice as much to build, but by then the land has appreciated in value times five. Do the maths. You have less money tied up, and you are therefore making money with a smaller investment. You can probably buy three plots for every house you could have afforded. That's much better leverage.
So much for Bucharest, but what about the Black Sea coast?
I have serious reservations about the Black Sea resorts. For a
start, this country is further north than Bulgaria which is already
larded with coastal developments. The Bulgarian season is short
compared to that in Mediterranean Spain, and the Algarve or Morocco.
There isn't a winter season in fact. The last time I was in Sunny Beach
it was february and the snow was a meter deep, and temperatures were
minus 7 degrees.
This region is over-developed already. There isn't room to make money
here. Unless you want your own holiday home here, leave well alone.
Because of the over-development the rental chances are likely to be
slim. You could well make money from mid June to mid September, but you
will find the resorts deserted for the rest of the year. Do any rental
sums on the assumption that the most you are likely to get is a ten
week season.
Remember that for the rest of the year your investment is standing
lonely and cold while folks are still swimming in Southern Spain, and
sipping sangria on their balconies.
On the other hand, the Danube delta is a fascinating place. Nature lovers, bird freaks and the like are sure to want to come here with their high power lenses. But you are a long way from the airport, and this is a small niche market.
I thought the best idea from a tourist point of view was a pad in the Carpathian mountains. This is why I went to Brasov.
First, may I say that I found Brasov a dump as well. More of the terrible blocks of crumbling flats, and a dull city. Lovely tree-lined boulevards of course, and plenty of the people's parks, but not a lot else.
I had assumed one could fly in to the international airport here and drive out to a nice spot that could be used for summer walking tours in the mountains, winter skiing, and the occasional side trip to a famous medieval monastery, or to Dracula's castle.
I'm sure there will be a market for this, but not at the
moment. There are flights to Brasov, but there are also flights to the
western end of the Carpathians, and that seems a better bet. The
mountains are great, but again, they are nicer towards the western end.
And Dracula's castle is not much to look at.
I suppose I ought to do a brief bit about Dracula. Basically Bram Stoker's book was based on a small part of the life of a count named Vlad Tepes. He was the ruler of that part of the world in about 1450. He was engaged in fighting the Turks, who had managed to over-run the country. He chased them out, and then retreated to his castle high up in the mountains along a narrow gorge to the north of the old capital city, Curtea de Arges.
We spent a pleasant day cruising up the valley as far as the new reservoir, and then had a picnic lunch by the side of the babbling stream. It was all very sweet, and almost Lake District in its way, and I took a couple of pics of the castle ruins. I did not ascend. You can take it I have seen enough castles to last me several lifetimes. In fact the words "Oh Dad, not another castle!" still ring menacingly in my ears, as I pass another one.
There are of course other castles which Vlad used, or allegedly used. But I rejected this attraction as a means of making money from an investment property.
Then I went west into what is called Transylvania.
I must admit I fell in love with this part of the country. I
could see far more tourist attractions here. The towns are charming and
interesting, and there are strong links with Germany. Not only that,
but Sibiu is currently the European cultural capital.
This part of the country deserves a separate article with quite a lot of pictures, so I'll talk about it in the next bulletin.
Hope you found the above helpful and interesting. Do get back to me with complaints and suggestions, or indeed the odd word of praise.