Considerations Regarding the Economic Evolution and the Real Estate Industry – part I
Romania is in the economic crisis, the first and the most affected fields being the financial and real estate industries, this being due to the fact that in the last 3 to 4 years they had a spectacular evolution, caused firstly by the explosion of foreign investments in Romania along with the integration process in the EU.
The financial crisis and the contraction of the global economy influenced meaningfully the Romanian industry as a whole starting with the end of 2009, generating problems like high unemployment and bankruptcy, another burden for the financial system, which in turn influenced the consumption as well.
Through the relaunch of the global economy, I think that the first positive signs will show up next year starting with the last affected field – the industry, especially the restructured one and in the possession of multinationals, which are going to be developed after the new post-crisis models.
When I talk about post-crisis model, I mean the relaunch of some top areas like the renewable energy, eco-automobiles, IT, agriculture and bio – food industry, which will access financing and will evolve after environmental-friendly models. Same patterns require a change in the perspective of value and money accessibility, even if they will be influenced be inflationist aspects, and also by a change in the perspective of energetic consumption. It is obviously that the energetic and environmental problems will generate the next big crisis globally.
As effects of the present crisis, I consider that most of the misfit industries and the entrepreneurs without a managerial vision will disappear, making space to an industry mainly unpopulated, with reduced energetic consumption, forward looking and lead by competent managers.
The last massive restructuration that Romania did not finish it before the entrance in the EU will be finalized be this crisis. The financial system and the real estate industry are going to be the last sectors which will overcome the crisis, because the first field did not managed to quickly eliminate the bad loans and establish a new start , and the second one is conservatory and past oriented.
The financial system will pass the next 6 to 12 month through a beneficial purgatory, preparing itself for a period of consolidation – Romania does not need more the 40 banks. The real estate sector will be confronted with amputations and resounding bankruptcies until it will start developing on a new base in which the localization, quality urbanism, low energy consumption, ecological houses will arise as a natural response, with accessible prices at the demand of pretentious clients.
Unfortunately, the recovery of the Romanian economy is not going to be fast, due to the authorities’ lack of vision, to a heavy and expensive bureaucratic system, and also because of inefficient budgets.
The only chance will arise when the IMF will get more involved in the economic policies and in the administration of the restructuration of the government spending.
Dr. ec. Adrian Crivii, FRICS, MAA