Q: What are the current trends in the real estate industry? Is it a search for the biggest boost in value over a certain period of time? Is it a hunt for real estate properties while the interest rates are still low? Are the people looking more or less to identify attractive investment opportunities?
Mircea Uzunov: Real estate has always been a relatively stable market for investment. Each segment has its particularities, with the residential sector in Romania being characterized by the very high share of owner-occupied compared to other countries (96% Romania, 51% in Germany).
The global population is growing rapidly and we cannot live in the cloud, so the demand for residential units will continue to increase.
Of course, some cities grow faster than others, being preferred by the more mobile young generation. And the example for Romania is Cluj.
We also have to consider that the average residential prices in Romania are below the prices in many other cities in Europe, and this makes the entry barrier to buy a property much lower in Romania.
The interest rate is a very important factor, also for real estate, and both developers and investors are more interested to benefit in the periods with low levels of interest rates.
The value of properties increases in time differently across segments, but it also increases with inflation.
Q: Let’s talk about trends. Romania has had an economic growth for some time and the purchasing power is increasing. How do these factors affect the real estate industry in 2018?
Mircea Uzunov: The increase in purchasing power industry allows people to upgrade their standard of living, and to afford bigger and better quality properties. People invest in the location, the size, the view, the finishings or the underground parking.
Q: Please tell us where the Romanian real estate market stands compared to its position in 2008.
Mircea Uzunov: Market in 2018 is more consolidated, while in 2008 the market had a high share of speculative investors. Speculative investors are looking for short term gains so they drive the prices up very quickly. What we see now are investors which provide solutions for specific needs of the market, medium to long term.
Q: Who is more interested now to invest in real estate in Romania? Are there Romanian investors? Are there foreign investors? Are there real estate funds?
Mircea Uzunov: The real estate market is segmented, and in each segment the players can be different. Romanian investors are active, they are familiar with the market and can assume the risk more easily. Foreign investors take longer time to understand the market and decide, but many foreign investors have already had a presence in Romania for a number of years. Investments funds are looking for larger investments, and the offer is more limited.
Q: Over the years, the real estate industry has managed to stay relatively hidden from many of the tech disruptions who have transformed other industries. How is the situation in 2018?
Mircea Uzunov: One of the important changes in the real estate industry comes from the smart use of office spaces. Companies offer employees the possibility to work from home, so at one moment in the day you will not have 100% employees present. Employees may have to book their desk in the office (not the same desk). This way, companies save money from using less office space from the total space required for all the employees.
In retail, online commerce is making a big change, but Romania is not very developed in retail to be affected. On the contrary, there is a strong increase in demand for logistics space to cater the regional or local online commerce.
Q: What’s the ‘’today, tomorrow and the future’’ of Artificial Intelligence in Real Estate?
Mircea Uzunov: The new industrial revolution will bring important changes in real estate and across industries. Buildings will be more efficient and their use will be more efficient. Shopping malls are currently tracking their customers over the wi-fi network to understand their behavior, office buildings and companies will do this with the employees.
Lower communication and transportation cost will change the way we use real estate and new areas will open.
Q: Besides the real estate industry, what’s your personal bet on other businesses? Where do you put a major degree of trust, after the real estate industry? What’s your view about the return of investment in the art industry?
Mircea Uzunov: My personal bet on other business is something started from my passion for art.
I own a small art gallery and my greatest satisfaction as a curator, is to discover, promote and grow young artists, to make them known to the public and to bring them to the highest heights of success. My bet is now on few very talented young Romanian artists, promoted in my gallery, and my every day goal is to bring their works at the highest value. To believe and to invest in young artists is the key to a successful investment in art.