Romania's property market is showing no signs of 'unblocking' as the country faces value falls of up to 50% across all sectors from peak levels, panellists at the EXPO REAL investment forum agreed.
Speaking at the debate on Romania, Christopher Berlew, managing partner at law firm Salans in Bucharest said: "Romania turned out to be one of the biggest bubbles in the region. The real estate market has taken a nosedive over the past year and a half."
Romania, which joined the European Union in 2007, experienced record levels of investment in the year, totalling around E1.5bn according to CB Richard Ellis, with prime yields on office properties reaching 5.5%.
But the panel, chaired by Property Week Global editor, Lucy Scott, concluded that interest from international firms had now waned and that over-development, especially in capital city Bucharest, was clogging up the market.
Ilias Papageorgiadis, head of More Real Estate Services in Bucharest, said: "There was optimism in 2005 and 2006. In 2007 there was arrogance. In 2008 there was a refusal to face reality.
"Everything was overbuilt, over-estimated, as if Bucharest would replace Manhattan in three to five years," he added.
Berlew added that the market would not unblock until the gap between vendor and buyer's price expecations closed but said that it was "most likely" the gap would remain until the sellers got truly distressed. "That won't happen until the banks get tougher on them," he said.
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