Arable land in Romania offers the greatest potential in a European comparison
Worldwide, arable land is increasingly in demand. However, the choice of location is just as important when buying farmland in Romania as it is for conventional real estate. Three criteria are decisive in the investment decision:
– Soil quality
– Precipitation
– Logistics
Farmland in Romania fulfills precisely these three success factors in many areas of the country.
Arable land Romania – mostly prime black soil
The first important criterion is the quality of the soil. More than 50 % of arable land in Romania is covered by first-class black soil, in some cases with over 100 soil points. Significant deposits of black soil exist worldwide only in Russia, Kazakhstan, Romania, Bulgaria, Hungary and North America. Black soil can only be purchased worldwide in Bulgaria, Romania and North America.
Arable land Romania – often drylands
Precipitation also determines the success of an investment in arable land or the profitability of farming. This point requires increased attention in Romania. Much of the arable land in Romania is dryland. Precipitation data based on total annual precipitation is less useful for accurate assessment. On the one hand, the corresponding mapping depicts the annual precipitation with only large-scale differences. Secondly, the maps make no statement about the distribution of precipitation, which in Romania is decisive for the yield of a location.
For example, different areas with the same precipitation level are shown, but the amount of precipitation is 100 mm or more higher at one location within the relevant time window. This has a decisive influence on the yield level; deviations of up to 6 t/ha of maize are not uncommon.
Romania farmland – proximity to the Black Sea is crucial
Unlike many locations in Western Europe, there is a lack of local demand in many places in Romania. Romania is an export country. The overall economic efficiency of the respective location is therefore decisively determined by the logistical connection. The export route is via the Black Sea. In this respect, it is simply the distance to the Black Sea that determines the value of arable land in Romania.
Key success factor – the land register
In addition to the economic framework conditions, the legal requirements form the second necessary strand. Romania has a very modern land registry system. However, a significant part of the land has not yet been surveyed and entered in the land register. The preliminary stage of the land register, the so-called title deed, serves as proof of ownership of these areas. The Romanian legal situation only permits a notarized purchase agreement for farmland in Romania in the case of a land register entry. We strongly advise against attempts to circumvent this by means of powers of attorney or preliminary contracts. The takeover of companies that have concluded corresponding contractual constructions is particularly questionable.
Why is arable land still so cheap in Romania?
Local arable farms continue to modernize and expand.
The resulting lack of liquidity means that land purchases are only possible to a limited extent. So far, banks in Romania have been reluctant to finance land purchases. The interest rates range between 5% and 7%. The lending limit is 50%.
However, extensive preparations are being made at this point. Imagine real estate prices, for example. in Munich if buyers had to pay purchase prices with an equity share of 50%.
Why can we accurately assess arable land in Romania?
Our practical work on the ground is crucial here. We have been actively farming locally in Romania since 2006.
How do we overcome the hurdle of registering farmland in the land register in Romania?
germanagrar has been involved in the purchase of farmland in Romania since 2002. We can look back on almost two decades of experience and have a highly qualified and experienced workforce.