By Property Secrets' Investment Broker

What's really bugging me at the moment is some of the twaddle I keep hearing about the property market in Romania.

Why is it, I wonder, that Romania attracts so much quite clearly erroneous discussion.

I don't wish to be rude to anyone, but I must say that I have heard and read some truly ludicrous speculation about this market.

Here are some the biggest myths I've come across:

• The market is hyped
• It's driven by investors
• It's expensive

Right. I want to get some facts straight here AND I'm also going to issue a challenge as well, just to nail any suggestion anyone out there might have that I'm talking this market up.

I'll come back to this in a moment, but I'm doing this because I want to make it clear that, after years in the property business, you simply cannot shout excitedly with any conviction about markets you don't believe in. I can't anyway.

Plus, let me make it absolutely clear, that I'm not only someone who puts deals together for Property Secrets investors, I'm also very much an investor myself. In fact, I don't mind revealing that I have a portfolio of nine units in Romania and that I intend to add to that number.

Like I say, I'll come back to the challenge in a moment.

I've spent a lot of time in Romania now and I've spent a great deal of time talking to people who really know this market - that's probably why I get so worked up when I hear myths being peddled.

The myths

Let's deal with these myths.

Is the market hyped? And is it driven by investors?

Well, let's think about what this means. Do I think that developers and agents have hyped this market? Absolutely not! What is true is that more and more people are recognising the opportunity in Romania - and it is big, undoubtedly.

Is the market driven by investors?

You only have to see the fervour with which Romanians are now buying property - and the excitment when an attractive development goes on sale - to realise that, how ever many investors there are in this market, it is being driven by domestic buyers.

There is simply no need for developers to hype the market because developments sell without any.

I've talked before about this idea that Romania is expensive. And there are two very important factors to bear in mind.

Salary data

One, salary data refering to average wages means nothing, if you are looking at a specific sector within a property market.

We are really only concerned with what people earn within that sector - and, believe me, it's a surprise to many people who have preconceptions based on statistical data and official reports. The fact is that there are plenty of very, very well paid Romanians about.

The second factor is that Romania has a very high level of home ownership - over 90%.

And that level means that many many people have locked in equity in the form of the panelaks they were virtually given after the fall of communism.

By taking on a relatively small amount of mortgage debt, many people can easily afford to sell their panelak (which trade at reasonable levels, by the way) and trade up to a modern Western style apartment, which represents the kind of lifestyle they aspire to. And this is what is happening more and more.

I'd advise people - investors anyway - to be very careful about whose views on Romania they take on board. Only listen to those who have really spent time talking to people who know and understand the market - yes, and that includes me!

So when you hear the same old stories, be wary. The market isn't flooded with foreign investors, it is not 'too expensive' and the domestic market isn't too poor to buy or rent - just take a moment to reflect on what I've said.

Because we've heard all this before and the only thing that has changed is the country's name.

I've been investing in property for 17 years - I might not be great at many things, but, believe me, property markets are what I really know about and I would not be sourcing deals in this market if I didn't believe they would produce fantastic returns.

More convincingly for anyone who is sceptical is the fact that, like I say, I'm buying in this market. I know a great deal and a market that will boom when I see one close up.

I've met the local agents and developers out in Romania and I've seen first-hand the transformation that is going on here - it's is absolutely crazy!

Look at the real facts

If you really want to know how the Romanian property market is taking off just look at the facts - they speak for themselves.

Property Secrets sold units at Belle Vue at €1,300 / sqm but in just four months they have leapt to €2,000 / sqm - a 35% increase.

Park View went on the market at €1,098 in November 2006 and is now worth €1,750 in just eight months - a 59% increase.

We were the only investment group in these two projects so talk about the market being investor-driven is just pure fantasy. We're not in competition with other investors but the local domestic market, which is more than happy to accept staged payments.

Anyone who has been to Romania themselves can see the huge demand from the domestic market. Whole phases are selling out and devolopers are now holding out releasing further phases because they are waiting for the prices to rise even higher.

Is that hype? Is that demand from investors rather than from the domestic market. Of course not!

Claims that the Romanian market is investor-drive just don't stand up. Why would a developer sell to foreign investors if he has a ready-made domestic market queing up on his doorstep who are prepared to pay complicated staged payments or even cash? This is happening, believe me!

And the reason this is happening is that there is affordability.

Business is booming with new companies heading here, such as Microsoft, who chose Bucharest as their Eastern European base; and blue chip companies such as KPMG are moving into the country. As a direct result we are seeing wages increasing significantly in some key areas of the jobs' market - and this is leading to greater affordability.

I've heard people quoting the figure for the national average salary of €450 a month gross, and then making ridiculous comments that Romanian people are all poor.

You have to put this figure into context.

This is an average. It includes the hundreds of thousands of people living in great poverty in rural areas and it doesn't in any way capture the very high salaries many people are earning, especially in Bucharest, where a professional in a blue chip company can command a very significant salary indeed, a significant salary even for an equivalent job in the UK.

I have just been to cafe in Bucharest counting Lamborghinis and other super cars parked outside, now how often can you do that in the UK? OK, I know this kind of analysis is flawed because it's just a snapshot - but it does give an indication.

There are some people who claim that car spotting is simply a tourist attraction but any canny investor knows it's a good, quick way to get a general benchmark on an area's wealth.

There is a sheer arrogance I keep coming across with people Romanians are a poor people who can't afford to buy. I have meet these poor Romanians in Bucharest and elsewhere, and I can tell you that many of them have good, very well paid jobs.

And these people have no or very little mortgage debt - they've got all this equity tied up in their panelaks.

In Poland, mortgage lending has really taken off because borrowing money is the only way to buy - but this just isn't the case in Romania.

In Romania, people were given their panelaks so they already have huge amounts of equity.

Currently there are 100% mortgages available for domestic borrowers and more products are set to come to the market, which will increase competition and widen affordability even further.

Big growth to come

We've only had about six to nine months of growth so far, I reckon, and I confidently predict we're still in for another 30% a year for the next two years.

I'm being conservative here because when you see what this market is like and how excited it is, I wouldn't be surprised if see 50% price growth a year.

Now for my challenge.

I'm prepared to put my money where my mouth is because I reckon that's the best way to sound convincing.

The reason why I'm so committed to explaining the Romanian market to investors is not because I'm trying to sell it beyond all other markets. We could always say that the myths were right and move on to another market.

No, I'm banging the drum for Romania because I want people to realise what a great property investment opportunity this country is. I completely regret not being able to buy more units when I first arrived in Romania a good few months ago. I have, as I say, nine units, but I'd like more.

So the challenge is this: anyone who wants to sell their units in Romania just give me a ring now.

Come and see me at the Property Investor Show in London in a couple of weeks and I'll take gladly take your Romanian units off your hands.

That's a promise.