Sibiu, Romania - A key contender for the 200% Club?

Neil Lewis, CEO at Property Secrets, has set his fellow colleagues, Property Secrets’ members, and website blog readers a challenge - the challenge is to go in search of cities in Europe that have achieved a whopping 200% capital growth within a 5 year time frame, or alternatively, show the potential to achieve this within the next 5 years.

Having bought property in Valencia 5 years ago that has recently achieved a huge 200% profit, was the reasoning behind this challenge set by Neil.

One of the recent week’s locations of choice was a coffee shop heaven called Sibiu in the Saxon centre of Romania, a surprisingly Germanic looking town lined with coffee shops, hotels, bars and restaurants, showing all the fundamentals to be a strong contender.

The city, home to 170,000 odd residents, clearly has a lot of money. Some of that money has been brought from abroad from a Saxon (ie German) mayor. Sibiu’s previous name was Hermanstat – and the link with German is very close - and very important.

The small city is also linked with Valencia, Spain and Luxembourg. And it was the link with Luxembourg that bought the European City of Culture award and a lot of support and advice to renovate the city centre – and keep the building structures in tact.

In addition, the city has benefited from the work of the GTZ a German/ Romanian partnership.

The truly surprising thing is – just how Germanic (ie ordered and comfortable and prosperous) this part of Romania is.

And the German influence goes into business as well.

The airport is currently being extended and expanded, part of which is being carried out by a German company – Lindner.

Siemens has a large factory on the outside of the town and has just bought a building near the old town.

Either way, the city is awash with German companies and German entrepreneurs who appear to find the location much easier to do business in than - than the more extreme Bucharest and of course, much more exciting (business wise) than Germany. This, in turn is drawing other west European companies to Sibiu too.

There clearly is money in the city. And that has to translate into property price growth.

With an almost perfectly retained old city centre – albeit in need of renovation around the edges – the city has not really been destroyed by the years of communism.

However, its layout – mainly town houses – and traditional Saxon houses, means that the housing density is low.

The thing that surprised the local Romanian developer that we spoke to was that the majority of people placing deposits for his development had ordinary jobs – bank tellers, semi-skilled workers etc. And, on his previous development, 80% of people had used a mortgage to finalise the purchase.

These were not the cash buyers of which the property market had consisted until now.

This is the first sign that ordinary people were able to earn and raise sufficient money to finance a new property – and that they really wanted it.

Sibiu is not, therefore, just a beautiful relic – a tourist centre – but, it is also a centre of enterprise and investment. From a UK perspective, it is a combination of a Bath or York – but with the growth potential of a Bristol or Leeds.

As such, the market and opportunity, has to be a key candidate for the 200% club.

To take part in this challenge and see other cities set to show high capital growth potential, view Property Secret’s blog page at: propertysecrets.net/blogs/max_growth/#