Popp said real estate loan interest rates are still high despite the promotion campaigns banks have carried out this year, so that those who want to buy a home are still reluctant and prefer to wait.
“Had banks really been interested in granting loans, they would have sweetened lending conditions, which has not happened. Under the circumstances, ordinary people have to choose between two evils, namely a very high interest rate for a leu-denominated loan or a somewhat lower interest rate for a foreign currency loan, which has an almost impossible to assess risk attached to it,” said Popp.
He specified the company’s sales in 2011 did not change significantly from last year, when they reached a very low level. From EUR41 million turnover in 2008, Impact’s sales slumped to just EUR8.1 million last year and the company slipped into the red.
“The prices of apartments we put up for sale have been constant this year, at below EUR700/square meter outside Bucharest and at around EUR1,200-1,300 in Bucharest,” said Popp.
“Sales of Impact developed apartments were approximately flat from last year, maybe even weaker. The sales increase budgeted for this year has to do with sales associated with some deals I cannot tell you more about,” added Popp.
He expects better results for the second half of the year in the absence of major foreign market turmoil.
Revenue from the core business is expected to rise by 67% in 2011, to 44.4 million lei (EUR10.4 million), but not enough to drive the company into the black, with an operating loss of RON0.52 million being expected.
Impact management says that one of the major decisions the company has to make in the following period is the moment it should restart investments. (EUR1=RON4.2454)
(English version by Catalina Apostoiu, editing by Loredana Fratila Cristescu)