Useful Information about Romania
Index to Useful Information about Romania
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The following information is compiled to the best of our knowledge and in good faith. E&OE.
Overview
Romania is the largest of the Balkan states and is referred to as the crossroads of Europe, located in the South-Eastern part of Central Europe, in the Northern part of Balkan Peninsula bordering the Black Sea. It is served by six international airports: Bucharest Otopeni and Bucharest Baneasa, Constanta, Suceava, Arad, Sibiu, Timisoara.
The Latino Romanians are unique, surrounded as they are by Slav neighbours. Various empires have come and gone over the centuries - Roman, Ottoman and Austro-Hungarian – and have all left their legacy in this country which enjoys a rich cultural and natural diversity.
From the heavily forested slopes of the Carpathian Mountains to the unspoilt nature reserves of the Danube Delta wetlands (the largest wetlands in Europe) and some 70km of the finest white sandy beaches on the Black Sea coast, there are numerous health and winter resorts, offering something for everyone, including some very popular treatment centres offering mineral-rich mud baths, thalassotherapy and the famous Romanian Gerovital cure.
Romania enjoys summer Mediterranean temperatures on the coast and cold winters in the Carpathian Mountains, where there is snow from December through to April.
Transylvania’s Saxon towns reflect Romania’s cultural heritage and it is home to Bran Castle, made famous by its associations with the mythical Dracula. Other fascinating places to visit are the legendary decorated monasteries of Bucovina and the beautiful rural village of Maramuras.
Romania’s capital, Bucharest, has been given the nickname ‘Paris of the Balkans’, but the medieval city of Sibiu in Transylvania came to the fore when it was crowned European Capital of Culture 2007.
Following the overthrow of Nicolae Ceausescu’s communist dictatorship in 1989, Romania succeeded in its efforts to gain admission to NATO, (2004), and in January 2007 became a Member of the European Union, following in the footsteps of neighbouring countries.
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Facts and Figures
Official Language: Romanian
Currency: New Lei (RON) – Rate: 1 Euro = 3.72 Ron (on 20 March 2008)
Area: 238,391 sq km (92,043 sq miles)
Population: 22,270,000
Capital: Bucharest, of which population is 2 million + (in 2005)
Climate: Temperate /continental. Summer Mediterranean temperatures on the coast and the winters are coldest in the Carpathian mountains, where there is snow from December through to April.
Public Holidays January 1 - 2 (New Year), 6 January Epiphany, Easter Monday (Orthodox), 1 May Labour Day, 1 December National Day, 25-26 December Christmas.
Standard Time: Eastern European zone time: GMT +2 hours
Religions: Orthodox: 87 per cent; Roman Catholic: 5 per cent; Reformed: 3.5 per cent, Others: 4.5 per cent.
6 International airports: Bucharest Otopeni and Bucharest Baneasa, Constanta, Suceava, Arad, Sibiu, Timisoara.
Geographical position: Romania is located in the South-eastern area of Central Europe, on the Northern part of the Balkan Peninsula, covering the Carpathian Mountains and the Danube lower course. It shares borders with Hungary, the Black Sea, Yugoslavia, Ukraine and Moldova. It is one of the largest countries in the area, second only to Poland.
Geographical Assets: Romania is at the junction of three prospective European transportation systems. It enjoys well developed networks of mobile telecommunications in GSM systems; rich natural resources, including fertile agricultural land, oil and gas and a skilled labour force with solid knowledge in technology, IT and engineering;
Constanta is the largest port on the Black Sea and the completion of the Rhine-Main-Danube canal provides uninterrupted water access from the Black Sea to the North Sea).
Macroeconomic Indicators: GDP growth 2006: 7.7% FDI 2006: €6.80 billion GDP growth (est.) 2007: 6.5% FDI (est.) 2007: €6.20 billion FDI (forecast) 2008: €7.00 billion Inflation 2006: 4.9% Savings rate 2006: 19.5% Unemployment rate 2006: 5.2%
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Tourism in Romania
General
Romania is the largest of the Balkan states and is referred to as the crossroads of Europe, located in the South-Eastern part of Central Europe, in the Northern part of Balkan Peninsula bordering the Black Sea.
It is served by six international airports: Bucharest Otopeni and Bucharest Baneasa, Constanta, Suceava, Arad, Sibiu, Timisoara.
Romania has four distinct seasons, with summer Mediterranean temperatures reached on the coast and cold winters in the Carpathian Mountains, where there is snow from December through to April. The warmest month is July, with the highest temperatures registered in the south-eastern areas and the coldest is January, the lowest temperatures being in the mountains.
The Romanians are a friendly and hospitable people, who give a warm welcome to visitors from abroad. The language spoken is Latin-based Romanian, which traces its roots to ancient times in the eastern provinces of the Roman Empire. These days, many Romanians living in towns and cities can speak English, French or German.
From the heavily forested slopes of the Carpathian Mountains to the unspoilt nature reserves of the Danube Delta wetlands (the largest wetlands in Europe) and some 70km of the finest white sandy beaches on the Black Sea coast, there are numerous health and winter resorts, offering something for everyone.
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Beach Holidays
The warm climate, white sandy beaches, resorts, hotels and many sporting and entertainment facilities on offer make Romania’s Black Sea Coast a popular summer holiday destination. Other points of interest are the vineyards and ancient monuments; indeed, remnants of the ancient Greek culture dating back to the 7th Century, when trading colonies were created on the coastline, are still being discovered.
The Black Sea coast has long been renowned for its spas (Romania boasts one third of the world’s mineral and thermal springs) for the treatment of arthritis, rheumatism, gastric, nervous and other disorders. There are centres specialising in mineral-rich mud baths from the region’s salty lakes, thalassotherapy and the famous "Gerovital" and "Aslavital" original rejuvenation treatments.
For visitors to the Black Sea Coast who want a change from the beach, there are organised trips to various different locations such as the Danube Delta, the painted monasteries of Bucovina, nation's capital city Bucharest, or to nearby Bulgaria, Greece and Turkey.
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Places of Historical Interest
Romania’s mediaeval heritage is perhaps best shown in the many castles and fortresses do be found in the country, from the strongholds built to repel invaders in the 14th to 18th centuries to the more luxurious castles that were built from the 1800’s. Some of Romania’s castles have been the inspiration for authors, such as "The Castle from the Carpathians" by Jules Verne and Bran Castle became famous for its association with Bram Stoker’s “Dracula”.
Some of Europe’s best-preserved mediaeval towns are to be found in Romania, in Brasov, Sibiu (crowned European Capital of Culture 2007) and Sighisoara, which perfectly reflect Transylvania’s heritage. Tiny ancient shops and houses line narrow cobbled streets and many traditional arts and crafts are on sale along with antiquities in the little antique shops which are a feature of these fascinating towns.
Other fascinating places to visit are the beautiful rural village of Maramuras and the legendary decorated churches and monasteries of Bucovina, many of which have been given World Heritage status by UNESCO, for their continued protection.
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Nature
The Danube Delta is a UNESCO World Heritage site, home to more than 300 migratory and permanent bird species; 160 kinds of fish (including sturgeon from which caviar is taken) and 800 plant families. This, the largest wetlands area in Europe, features channels which open into beautiful tree-lined lakes, reed beds and marshes, forests of oak trees with dense flora, sand dunes and traditional fishermen’s villages. It is the perfect location for activities such as eco-tourism, bird watching, fishing, camping and hiking.
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Mountains
The Carpathian Mountains offer skiing conditions for the beginner through to the more experienced skier and is also the perfect location for horse-back riding in beautiful surroundings.
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Why Romania
A Great Place to Invest
Pricewaterhouse Coopers and Colliers have identified Romania as a top investment location and it is predicted that the Romanian market will grow five times faster than the Polish market. The channel 4 program “A Place in the sun has ranked Romania as the number 1 place to make money over the next 10 years. It predicts that £100,000 invested in Romanian property now could be worth £514,000 in 10 years, largely due to the impact of EU.
The Romanian market is predicted to grow 5 times faster than the Polish market.
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A Great Location
Romania is the largest of the Balkan states and is referred to as the crossroads of Europe, located in the South-Eastern part of Central Europe, in the Northern part of Balkan Peninsula bordering the Black Sea. It is served by six international airports: Bucharest Otopeni and Bucharest Baneasa, Constanta, Suceava, Arad, Sibiu, Timisoara.
Strategically located between Hungary and the Black Sea, Romania has access to more than 200 million consumers within a radius of 600 miles. With its strong economic growth and high level of Foreign Direct Investment, Romania is set to grow into a European hub for services, manufacturing and logistics, serving an expanding EU and providing many years of growing employment.
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A Huge New Labour Resource
With a population of 23 million, Romania is the second largest market in central and Eastern Europe, second only to Poland. A pool of highly educated, highly motivated and cheap personnel is not only attracting large foreign business investment, especially in manufacturing, it is also creating affluence and pushing up property prices.
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A Strong Growing Economy
With entry into the EU, Romania has extremely good economic prospects, which is putting pressure on property prices. In 2005 the World Bank reported growth of 4.1%. Real GDP growth in 2007 forecast to be 5.8%, or 2.4 times the growth expected in the EU.
European Member State as Of 1st January 2007 Following the overthrow of its communist dictatorship in 1989, Romania succeeded in its efforts to gain admission to NATO, (2004), and in January 2007 became a Member of the European Union, following in the footsteps of neighbouring countries.
Following its integration in the EU, Romania will benefit greatly from structural funding – EU funding of 19 billion Euros is confirmed for Romania between 2007 and 2013, which is expected to grow to 30 billion Euros.
The benefits of EU funding can clearly be seen in Poland since 2004 and in the strong economies of countries such as Spain and Ireland. One aspect is improved infrastructures and access: the new Sun Highway is due for completion this year, which will connect the Black Sea coast to Bucharest, a drive of less than 3 hours, making this coast more accessible to millions of Romanians.
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Factors that will drive property growth in Romania
EU Membership
This is difficult to quantify other than the obvious structural funding; however you only have to look at how well Poland has performed since 2004 to see how that EU membership is a benefit, apart from structural funding.
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GDP
Gross Domestic Product is increasing in Romania just as it did in the other eight eastern Countries which joined the European Union.
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Foreign Direct Investment (FDI)
FDI is increasing, with €5.2 in 2005 and €6.8 billion in 2006 (just as it did in Poland). Blue chip companies such as Microsoft, Oracle, HP and Nokia are employing a huge number of people in the long-term, to take advantage of the highly skilled workforce. This is a huge factor driving the property market as it all comes down to affordability.
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EU Structural Funding
Following its integration in the EU, Romania will benefit greatly from structural funding – EU funding of 19 billion Euros is confirmed for Romania between 2007 and 2013, which is expected to grow to 30 billion Euros. In terms of structural funding, you only have to look at the Spanish and Irish economies to see how hugely they have benefited from EU funding.
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Wages
Wages are very low, but it is very difficult to get an exact figure on how much they are rising due to the fact that the overall figures take in the whole country. The main rises are in cities such as Bucharest.
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Maturing Mortgage Market
Slow to develop, it was only in 2006 that the mortgage market opened up to foreigners with a low loan to value of only 75% and quite high interest rates, for a maximum term of 20 years. Some improvement is now being seen, with a few banks now offering 100% LTV to Romanians, so with high home ownership rates and the introduction of mortgages, there will be an impact on the property market through equity release. Currently, the mortgage debt in relation to the GDP is only 6%, very low compared with the UK and Ireland which are at 60%, so it has a long way to grow.
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High Home Ownership Rates
The home ownership rate in Romania is very high, at 95%. With such high home ownership rates and the introduction of mortgages, this will be a huge driver of the property market though equity release.
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Mediterranean Style Holidays
General
With marvellous weather from spring to autumn and miles of golden sand, Romania's Black Sea Riviera is the ideal destination for beach holidays.
One can find everything here: modern hotels and facilities, a busy night-life, a wide range of sports facilities and numerous inland attractions from castles to vineyards. In a country which has a promising future, the Black Sea is featuring strongly on the European tourist agenda.
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From Wildlife to Watersports
The Romanian Black Sea coastline of 245 km (153 miles) takes in the unspoilt natural reserves of the Danube Delta to the leisure-related holiday centres located in the southern 72 km (45 miles) of white, sandy beaches, which has seen the development of a string of beach resorts and health spas catering for all ages and interests, from young children to their grandparents. Black Sea tides are practically not-existent, so swimming is far safer than in most other parts of the world.
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Constanta
An area with a truly cosmopolitan feel, Constanta boasts an international airport, a busy seaport, express trains linking it to Bucharest (2 1/2 hours) and a 2,500 year history (the Roman poet Ovid lived in exile here).
Other features include hotels, shops, ancient monuments, a sea-side casino and some fascinating museums and all the other Black Sea resorts are easily accessible either by train or bus.
South of Constanta – of beauties and gods.
From Constanta, a 50 km (31 miles) strip of fine golden sand stretches all the way to the border with Bulgaria; bearing a number of resorts poetically named after women and mythological gods.
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Renowned Therapy Treatments
The famous balneary spa of Mangalia, with its special cure hotel, is located in what was the 6th century BC fortified town of Callatis. Along with other spas in Eforie Nord, Eforie Sud and Neptun, a wide variety of therapeutic treatments are available, including mineral-rich mud baths, thalassotherapy and the famous Romanian Gerovital cure.
Highly qualified medical staff man clinics and consulting rooms which are open throughout the year, therefore professional therapeutic treatments can be enjoyed alongside the pleasures of a seaside holiday.
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Local Tours
In addition to long-distance tours to the nature reserves of the Danube Delta for bird-watching, hiking and exploring its wonderful waterways, trips are available to see the legendary decorated churches and monasteries at Bucovina; the 7th Century BC Greek city ruins at Histria, or to the historic city of Bucharest, all of which offer a fascinating break during a beach holiday. The countryside offers beautiful scenery, including the hillside vineyards producing Romania’s great wines, including the famous Murfatlar.
Cottage industries such as woodcarving and pottery are alive and well in the villages and folklore centres display traditional costumes. True Romanian hospitality can be enjoyed at feasts offering traditional local dishes, wine, plum brandy, music and dancing; an experience not often to be found on most beach holidays.
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Why Romanian Black Sea Coast?
The New European Mediterranean
Known as the New European Mediterranean, the Romanian Black Sea Coast is one of Europe’s fastest growing tourist destinations, enjoying summer Mediterranean temperatures along the coast.
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Excellent Growth Potential
Figures from the World Travel and Tourism Council show Romania as seventh out of 176 countries for forecast growth of its tourism industry and it is referred to as a “very large, least intensive and fast-growing travel and tourist economy”.
Due to its popularity as a tourist destination, there is huge potential for real estate development to meet the demand for second homes and investment property in this beautiful area, from which buyers will see great returns on their investment by way of high rental returns and rising property values.
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Low Property Prices
With property prices on the Romanian Black Sea coast far lower than those of its neighbours, a rising demand for quality build and improving EU-funded infrastructures, this is considered to be a prime opportunity for development, promising great potential for growth and return on investment.
With only 70 Km of coastline available for development in Romania, a national population of 22 million and a rising tourism flow, it is anticipated that the demand will far exceed supply and therefore property prices are set to rise quickly.
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Shortage of High Quality New Developments
Whilst tourism is growing at a rapid rate, there is a shortage of good quality new developments offering the high standards of design and amenities found in Western European construction, ever more sought-after by affluent Romanians and foreigners wishing to buy. Until now, developments have been sadly lacking in quality of build, design features, facilities and parking, therefore new high quality developments are at a premium.
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Lack of Quality Rental Property
There is a severe lack of quality holiday rental properties on the Black Sea coast. With the local population’s increasing “western values and desires” and predicted increase in tourism traffic flows, good quality new developments will carry a premium price tag. This will result in rental returns exceeding10% per annum, making coastal properties for sale in Romania an ideal investment.
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Warm and friendly people
Romanians are warm and hearty people, renowned for their hospitality to foreigners, famous for their respect and goodwill towards guests and visitors. Coupled with the beautiful and varied landscapes from the coast to the mountains, Romania truly is a place to visit.
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Improving Bank Service
With improving and evolving banking services and a generally higher standard of living, a growing portion of the Romanian population has access to bank loans at more favourable conditions than before. Along with holidays, cars and other luxuries which are becoming much more accessible, an increasing demand will be seen for both rental and holiday properties on the Romanian Black Sea Riviera.
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Improving Roads
The new Sun Highway (due for completion next year) will connect the Black Sea coast to the capital Bucharest, less than 3 hours away, thus greatly reducing the driving time and making this coastal area easily accessible to millions of Romanians for a short break or weekend away.
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Low Cost Airline Revolution
International access has been greatly improved by the low-cost airline revolution which is opening the way to many more destinations. EasyJet began flying to Bucharest last year, along with other low-cost airlines and now Ryanair to Constanta International airport, it won’t be long before more carriers follow suit, another factor which will increase property values.
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Vama Veche
Vama Veche is the most renowned and fastest-growing beach destination on the Romanian Black Sea Riviera, with an increase in visitors of 20% in the last year alone.
Located just south of Mangalia, Vama Veche (its literal meaning is “Old Border” due to its proximity to the Bulgarian Border) is a small village on the shore of the Black Sea. It has long been home to intellectuals and a Bohemian community of Romanian artists, actors, singers and dancers, whose numbers swell in the summer season, drawn by the annual music festivals which open each year on the 1st May weekend. August sees the famous Stufstock Music Festival which brings the season to a close.
This area enjoys a temperate climate, warm and dry (above 21ºC between June and September) which can be enjoyed on the lightly sloping sandy beaches and gentle tides; a perfect beach resort location with good swimming conditions.
Vama Veche offers a vibrant night life for those who like to party, with beach-front bars, clubs and restaurants, many of which are open 24 hours a day. A local dive centre offers diving trips to a shipwreck 150 m off the coast, for experienced divers and often, there is a chance to swim with the dolphins.
Whether it is to swim in the Black Sea, party at night, meet new people or have a bohemian experience, Vama Veche is a beach-sun-fun place, where the spirit is real!
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Why Vama Veche?
Fastest Growing Resort Destination
Vama Veche is the most renowned beach destination in Romania, it has been the fastest growing tourist destination on the Romanian Black Sea Riviera, with an increase in visitors of 20% in the last year alone.
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Improving Infrastructure
The local town council is currently in the process of implementing a comprehensive improvement plan (using EU funding) for the infrastructure in the coastal area of Vama Veche, which will result in a high standard of amenities and services for tourism and real estate development. This will also have a decisive impact on local property values over the coming years.
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2.5 Hours flying time to London
Situated only two and a half hours’ flying time from London, Vama Veche is within easy reach to enjoy a summer holiday. With the arrival of low costs airlines, it is inevitable that demand will increase and property prices will rise.
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Excellent Rental Returns
Due to the very high demand for quality accommodation and such a short supply, a two- bedroom apartment easily fetches €100 a night in high season and with annual rental returns currently exceeding 10%, Vama Veche offers some of the best rental returns on the Romanian Black Sea coast.
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Marvellous Weather
Its location in south-eastern Europe offers a pleasant, warm and dry climate (above 21°C/70°F between June and September). With a long holiday season (May – Oct), maximum opportunities for rental income also exist.
Ideal beach and swimming conditions,
A wide, natural and gently sloping beach with fine sand, minimal tides with calm low- salinity warm water between June and September makes Vama Veche an ideal beach holiday location for all ages.
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Vibrant Nightlife
Vama Veche offers a vibrant night life for those who like to party, with beach-front bars, clubs and restaurants, many of which are open 24 hours a day.
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Strict local planning laws
Strict planning laws in Vama Veche mean a lower density of building is allowed, with restrictions on new beachfront properties to a maximum height of two storeys. Building heights increase progressively the further back they are from the beach. These restrictions protect the area from over-building and over-supply, thus ensuring greater demand and increased values.
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Expected property price increases between 20-30% in the next 12 months
Property prices in the Vama Veche area are expected to increase by between 20 and 30% over the next 12 months, mainly because of the improved infrastructures and planning laws, making it the perfect investment opportunity for investors and second-home buyers.
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How to get there
Constanta International Airport
Domestic flights fly regularly to Constanta and international flights arrive from America, Germany and other Eastern European countries. As tourism develops in this region, more international airlines will fly direct to Constanta. From April Ryanair are flying to Constanta from the UK and Ireland (via Florence). Drive towards Constanta and then join the E87 down the coast to Vama Veche (72 km to Vama Veche).
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Verna Airport
Airlines that fly direct from the UK include: British airways, Bulgarian Air, First Choice, My Travel, Thomas Cook and Thomsonfly.
Take the E70 into Varna and then take the E87 up the coast to the border where you will find Vama Vecha just across the boarder (110km to Vama Veche).
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Bucharest Henri Coanda Airport
Direct Flights from the UK include: Blue Air, British Airways, Easy Jet, Tarom Romanian Airlines and Wiss air.
Drive round the ring road and join the new A2 motorway, where the A2 at Cernavoda join the C22 to Constanta and then take the E87 south down the Black Sea coast. (150 miles / 245km to Vama Veche)
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Property Related Taxes in Romania
Value Added Tax (VAT)
In Romania you must pay 19% VAT on all new property purchases (including payments) if you purchase the property as an individual, however by establishing a VAT paying Romanian Company to own the property you are excluded from paying the 19% VAT charge. This is a substantial saving and is a simple process that can be done for the most part remotely.
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Capital Gains Tax
Property held for less than 3 years the tax is 3% of the value of the property, if the property value does not exceed €57,000. If the value exceeds 57,000 Euros the taxation rate will be €1,764 Euros +2% from the value of everything over €57,000 Euro.
If the property is held over 3 years the Capital Gains Tax is 2% from the value of the property, if the value does not exceed €57,000. If the value is over €57,000 Euros the taxation rate will be €1,176 Euros + 1% of everything over €57,000.
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Local Taxes
Property owners of buildings are required to pay an annual building tax to the local authorities. There are different rates depending on whether the owner is a company or individual, the rates are as follows: Individual between 0.1% and 0.4%. For a Company the rate is between 0.5% and 1%.
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Rental Income Tax
If the landlord is an individual, the net rental income for buildings (i.e. after expenses deductions of 25%) is subject to individual income tax at a flat rate of 16%. If the landlord is a company, the net rental income is taxed at 16% profit tax. Expenses incurred for deriving rental income are tax deductible. In their Articles of association the company should have "rental income" listed as their object of business in order to be allowed to let real estate property.
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Expedia Property has also entered the Eastern European property market, as you will see we have a good selection of property for sale in Eastern Europe. Try searching Romania Property to see our range of Romanian Real Estate. We are marketing an exciting development of Black Sea Coast Apartments in Vama Veche located very near the beach. |
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