When one sees images of Romania on television, they're usually confined to Dracula and dark, stormy castles in Transylvania. So when a recent broadcast of the British reality show “A Place in the Sun” focused instead on some of the country's charming properties and their even more charming price tags, Britons took notice. Each week, the program follows the exploits of a couple from the UK looking to buy a second home abroad—ever since January, when the program featured a couple looking to invest in Romania, that country has reportedly seen a spurt in mainstream public interest.
If the program is to be believed, Romania is the top spot in Europe for investment, offering potential returns of up to 414 percent over the next decade. With the former communist state expected to enter the European Union in 2007, now may be the perfect time to sink money into the country. In 2004, HVB Bank Austria reported that Romania had a GDP growth of 8.5 percent, the second highest on the Central and Eastern Europe league table. Prices for property are still cheap by Western standards. In Bucharest, the capital, apartments start at around £50,000 and rise to £300,000-plus. Add to this the fact that the country has stabilized politically and is now in the midst of passing reforms that will make it easier for foreign investors to buy property, and it almost sounds too good to be true.
The key to successful investment in Romania is going to be timing. Property prices are rising rapidly and are expected to increase by 30 percent in 2006 in anticipation of the EU accession.
However, as the couple on “A Place in the Sun” learned all too well, the country can be a tricky place to do business. Romania remains one of Europe's poorest countries, and the legacy of former communist dictator Nicolae Ceausescu has been an unstable economy, widespread poverty, corruption and rampant high inflation.
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