Buying a flat in Bucharest is not an easy business. On the positive side, which is probably worth discussing in a whole separate post, apartments (particularly the ones built in the communist era) are very similar in terms of size and structure. I’ll fast forward through all the paperwork required, finalising with the exchange of contracts, and I won’t even bother mentioning all the taxes that need paying as well as the associated queues to various state institution. I’ll stick this time to a certain category of “bargains”: the red dot(ted) buildings (or, in Romanian ‘cladiri cu bulina rosie’). To summarise: if the price for an apartment you found is too good to be true…it probably isn’t.

Unlike UK, Romania is very close to an earthquake hotspot – the arch of the Carpathians, Vrancea county to be more specific. While Bucharest is not sitting right on top of it, it is not too far away either – 130 kilometers. For this reason, the lifespan of very old buildings tends to be very closely related to the number of earthquakes they endured. Just to clarify, we are not talking about Japanese-like frequency, with one occurring almost every week or so, but people do remember even the dates of major events – such as the one from 4th of March 1977.

What do earthquakes have to do with housing? To keep the story short, in recent years the state civil engineering committees made a list of buildings that are severely damaged by the past earthquakes and (at least) require structural strengthening to survive a future major seismic activity. These buildings, commonly known as Red Dot Buildings listed as structurally unsafe and, while the local councils cannot afford to repair them all in the near future, they do make the public aware about their status. Some of them bear an (in)famous sign at the entrance warning about their status but, for those that ‘forgot’ to put up the sign (although it is actually required by law), there are plenty of sources where you can find them; just search on google for ‘cladiri cu bulina rosie’ (red dot(ted) buildings) and you will find a list. To help a bit, I found one from 2006 in a news article from Cotidianul (the article is in Romanian, but have a look at the bottom of it for the PDF files starting with ‘imobile’ – one of the Romanian words for ‘buildings’) and there is some more information (all in Romanian unfortunately) on a website dedicated to earthquakes (in Romanian ‘earthquake’ is ‘cutremur’)

It might sound rather worrying, but, surely, nothing that the insurance cannot handle. This is where the problem lies: these buildings cannot be insured against structural damage! I did call several insurance agents and they all told me the same story – sorry, no insurance. As a result, you might be in for a bargain buying a flat in one of these buildings, but it will only last until the first strong earthquake. How does the market treat these buildings? With extreme care – if you are willing to take the risk, you can buy a flat in the heart of Bucharest for half of the price you would pay towards the outskirts districts for a similar apartment. Surprisingly, the rent for apartments in red dot buildings does not seem to be affected by their status; this, coupled with the fact that most of them are centrally located, can return a rather nice sum of money every months. So, to finish with a conclusion, you might want to go for a risky investment like this anyway, but it’s worth knowing what the dangers actually are.

Source: Romanian Property News