'And… in 5 years time… a coffee on the main town square of Cluj-Napoca will cost much more than 1.5€. I reckon it will be well past 3€ and average property prices will be 250,000€ and not 80,000€.' With respect, if PS were selling properties in Romania at 80,000 euros then I would be a lot happier about buying them. The fact is that the prices of your recent offers have been uncomfortably close to UK levels. I can't shake off the suspicion that developers are milking foreign investors for all they are worth. They saw what happened in Poland, and they know that investors want another slice of that.

Hi Minsk Fair point. I think one always has to be careful not to be the last investor to arrive at the party. However, I think there is a difference between Cluj prices and Bucharest prices. I don't think many developers are basing prices on Poland - perhaps with the possible exception of some international developers in Bucarest. Many of the developers I have met on this trip are Romanian and have been asking us to guide them on what our investors want - which suggests that they don't actually know too much about what is happening outside their own market? It is true that margins on land are substantial - but it is hard to argue that a new build should be less than a panelak - and these do sell for quite big sums. Still - land has risen very rapidly to a more market based price - and I think those margins are going to get badly squeezed in the next two years as construction costs rocket. Hence, investors getting fixed price contracts now will come out right in 1 to 2 years time once the contractors have put their prices up. It is true tho, that in any market that is as bullish as this one, that you need to be careful to choose right. Cheers Neil ps. We are just seeing the beginning of the Romanians living abroad - aparently Romanians living and working in Spain bought an entire first phase of a major development by a Spanish developer working in Bucharest in just a few weeks! They might be wrong - or we might just miss out - that is 64 million dollar question. Cheers Neil

Hi All I've just paid 5.5 Lei - that's about 1.7 Euros - for a Cappuccino in Sibiu, Romania. I'm consistently paying over 40 Euros for lunch - that is a family of four - the cost of diesel is higher than in Spain - but the same (more or less) as Italy. I've been told that supermarkets (which traditionally offer big savings on local general stores) are swamped! That was my experience when I saw the Carrefour store on Saturday afternoon - in the middle of August! Also, many medium and highly wealthy Romanians go abroad to shop for clothes - there is something to this, I beleive. Either way, for a middle class way of life - Romania is not cheap. It is not particularly expensive either - but the key point is that it is not cheap. As we know, property in those cities is not cheap either. Not expensive - but not dirty / basement level cheap. And - crucially - there is a significant proportion of people who can afford it. Notably - in the past two days - I have seen 1 Maserati, 1 Aston Martin, 5 porche's, 7 Q7s, lots of BMWs of all sorts - and lots of Audis. It is a surprising country! More to follow... Cheers Neil

Hi Neil and all, I have also travelled extensively in Romania this month, namely to Bucharest - Brasov - Iasi and hope to make it to Cluj soon to try a cappucino! I asked an estate agent in Brasov how much flats were and they said 80,000 - 110,000euros for 3 beds in areas with proximity to centre and double those prices in historical central areas.Seems similar to prices in Valencia about 4 years ago. Beautiful country and lots of development going on in cities and smaller towns.Iasi is a regional capital in north-west of Romania and even though this is quite poor region the city really impressed me and apartments can be bought there for as little as 40,000euros and its a beautiful place. Hotel prices have gone up a lot in last year, and albeit cheaper than Spain, not a total bargain by any means.Most double rooms are 50euro per night minimum in any relatively decent kind of hotel.Most quality food in supermarkets is imported and thus as expensive as in Spain. I have a sneaking suspicion that secondary market prices in 2nd tier cities are going to rise steadily in next few years.Doesn't buying a 3 bed apart in Brasov now for 90,000euro seem quite cheap? I have the same intuition for this market as I had with Wroclaw in Poland and Valencia in Spain 3 years ago. Liam

Hi Liam, Thanks for your observations on the secondary market. I have also though that this might be a better way into the Romanian market, rather than off-plan. 90,000 euros does sound pretty cheap, If I've done my sums right then off-plan units are going for about twice the price of secondary market apartments per square metre. Confusion can arise because they are measured differently. Of course new developments are going to have more prestige, and it is a matter of estimating the premium associated with this.

Hi Minsk, I don't know much about prices yet, but as I do more research we'll be in contact. I can only go by what I've seen in local newspapers etc. I agree with you, I'm not interested in any more off-plan deals now. I should never have gone down that road so late in Poland either. Anyway even though i got a good deal in Poland at Christmas, due to problems of off-plan process and banks, I will probably get out of Poland. I think the big gains have been had in Warsaw for time being and I can't really be bothered waiting for peanuts. Don't think capital growth this year is gonna be anything like it was over last 5 years and especially last year. Even though high gearing and all that sounds great in theory, I think in practice it ain't so easy in these Eastern European markets. My latest thoughts are that if I can release enough equity in Spain I will just buy a used flat in cash or 75% in cash. At the end of the day its high risk but I feel its the only way to go. What I'm looking for is big capital growth over 3-4 year period and then get out. I have a feeling the growth on any kind of property in key locations in major cities in Romania is going to be really substantial over next 2 years.Any ideas or opinions about buying secondary market property in Romania would be appreciated. Liam