Romania: El Dorado for farmland dealers

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Nine O'Clock | 12 February

Romania: El Dorado for farmland dealers

by Constantin Radut

On the 1st of January 2014, Romania became the first country in the European Union that liberalised the selling and purchasing of farmland.

There is no other country in the EU with a more permissive legislation in the field than Romania.

The law on the sale of agricultural land to individual persons in the EU and EEA was the subject of most specialised publications and analysts in the West at the end of 2013.

The land market in Romania is left to chance, any occasional businessman being free to trade arable or forest land as long as they have a good lawyer or are up to paying bribe to some civil servant.

In Western Europe the market is strangled by national legal constraints (France) or actual lack of it, with a very balanced demand –to-offer ratio (UK). There are also entirely specific situations. For example, the EU regulations ceasing milk subsidies as of 2015 caused land price to skyrocket in the Netherlands. Whilst a hectare of land sells for about EUR 50,000 now, in three years’ time the estimated price is believed to have reached EUR 58,000 – 60,000.

Under such conditions, it is obvious why the complete liberalisation of the land market in Romania was an event closely followed by dealers in Western countries and beyond.

From the point of view of the price of land, Romania can only be an El Dorado for anyone who has money and are willing to buy land in this country.

Bulgaria is not minded too much given the rather small land market of our Southern neighbour.

The table below captures the price of farmland in a few of the EU member states, according to FN SAFER (Sociétés d’aménagement foncier et d’établissement rural) of France, valid for 2011. The price of land hasn’t changed much either in the West or in Romania since then. The latest information run by the media are isolated elements on a totally deregulated market.

 

Average per-hectare price of agricultural land in selected EU member states

Class/

price

Country Prince in euro/ha Price level compared to previous year
1 The Netherlands 49 000 +4.4 %
2 Denmark 20 600 -6 %
3 Italy 19 400 +0,6%
4 England and Wales 18 000 +12%
5 Germany 16 400 +11 %
6 Spain 10 000 -1,6 %
8 Poland 4 900 +7,7 %
9 France* 5 420 +1,1 +
10 Romania** 2 700 +8 %

Source: FN SAFER/France * France = 2012 ** Romania = 2013 (JAR estimates)

 

 
Original source: Nine O'Clock
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