{"id":123844,"date":"2016-01-27T00:00:00","date_gmt":"2016-01-26T22:00:00","guid":{"rendered":"https:\/\/rhn.ro\/real-estate-bankruptcy-threatens-romania-again-coface-warns\/"},"modified":"2026-03-28T18:27:51","modified_gmt":"2026-03-28T16:27:51","slug":"real-estate-bankruptcy-threatens-romania-again-coface-warns","status":"publish","type":"post","link":"https:\/\/rhn.ro\/en\/real-estate-bankruptcy-threatens-romania-again-coface-warns\/","title":{"rendered":"Real Estate Bankruptcy Threatens Romania Again, Coface Warns"},"content":{"rendered":"
After a period of relative stability, insolvency threatens construction companies once again. This represents a major risk for clients who have bought or intend to buy properties before the project is completed and handed over to the new owners. The biggest problem encountered after the onset of the economic crisis, insolvency, is now expected by a considerable percentage of the entire market: according to Coface, a third of companies whose object of activity is construction could face this fate in 2016.<\/div>\n
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In the construction sector, 7% of the total active firms generate approximately 74% of the revenues recorded at the level of the entire sector. We are talking about 1,700 companies that recorded an annual turnover of more than one million euros in the last year, double compared to the previous year. These are the safest companies, those that can offer clients the guarantee of a finished product delivered on time and at the promised quality, according to the latest Coface report regarding the performance of the construction market in Romania. At the opposite pole, the most dangerous companies can be recognized by their pace of activity: those that only sell projects older than a year and have no new constructions in progress are, generally, companies with financial problems. They account for a third of the specialized firms.<\/div>\n
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„Among the firms undertaking residential and non-residential construction works that submitted declarations for the last year, 47% declared decreasing revenues, a third did not carry out any kind of activity, and half have a turnover of less than 100,000 euros. The analysis was conducted on 15,250 firms in the field, representing 95% of the turnover of the entire portfolio of firms in the market,” the Coface report states.<\/div>\n
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Half of the companies active on the market have a high risk of insolvency<\/div>\n
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Therefore, 50% of companies present a high risk of insolvency, 27% present a medium risk of insolvency, and 23% present a low risk of insolvency. However, in the last analyzed year, firms with construction as their main field of activity generated a total turnover of 28 billion lei, an 11% increase compared to the previous year, according to financial statements published by the Ministry of Finance. If there were more investments in technology, this figure could increase.<\/div>\n
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„Firms operating in the field need investments in re-technologization on a large scale. For the second consecutive year, the pace of technologization was below the dynamics of wear and tear, which leads to a lack of economic performance for companies in the field. Investments in fixed assets were at a level of only 5%,” the Coface report shows.<\/div>\n
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Romania ranks first in Central and Eastern Europe for payments to construction suppliers<\/div>\n
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The problems faced by construction companies also affect business partners, not just clients. Suppliers continue to be paid late, and debts overwhelmingly cover the level of assets.<\/div>\n
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„Commercial performance improved in the last analyzed year. Revenues, profits, and liquidity increased, but suppliers continue to be paid late. Total debts stand at 77% of assets, the average payment duration for supplier credit is 272 days, and receivables are collected at 168 days,” Coface officials continue.<\/div>\n
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This could mean either that construction companies are cautious and postponing possible investments for more economically favorable periods, or that there are no interesting opportunities, or that liquidity is kept for dividend payments. What is certain is that high debts are responsible for the deterioration of the net result of 48% of companies operating in the field. At the same time, payment delays place Romania in 1st place in Central and Eastern Europe in the top of countries making late payments.<\/div>\n
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Source: Imopedia\/Media<\/a><\/p>\n

Frequently Asked Questions<\/h3>\n

What is the current insolvency risk in Romania’s construction sector?<\/strong><\/p>\n

According to Coface, 50% of active companies face a high risk of insolvency, with one-third of the market potentially facing bankruptcy in the near future.<\/p>\n

How can buyers identify stable construction companies?<\/strong><\/p>\n

Stable firms typically have an annual turnover exceeding one million euros and active projects; currently, 7% of such firms generate 74% of the sector’s total revenue.<\/p>\n

Why is Romania ranked first in CEE for payment delays?<\/strong><\/p>\n

Romania leads the region due to an average supplier payment period of 272 days, largely driven by high corporate debts and a significant lack of investment in new technology.<\/p>\n","protected":false},"excerpt":{"rendered":"

After a period of relative stability, insolvency threatens construction companies once again. This represents a major risk for clients who have bought or intend to buy properties before the project is completed and handed over to the new owners. The biggest problem encountered after the onset of the economic crisis, insolvency, is now expected by…<\/p>\n","protected":false},"author":0,"featured_media":65892,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2857],"tags":[],"thb-sponsors":[],"class_list":["post-123844","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-transactions"],"article_style_override":"","post-style":"","post_via":"","post-top-image":"https:\/\/rhn.ro\/wp-content\/uploads\/2019\/11\/tranzactii-2.jpg","_links":{"self":[{"href":"https:\/\/rhn.ro\/en\/wp-json\/wp\/v2\/posts\/123844","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/rhn.ro\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/rhn.ro\/en\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/rhn.ro\/en\/wp-json\/wp\/v2\/comments?post=123844"}],"version-history":[{"count":0,"href":"https:\/\/rhn.ro\/en\/wp-json\/wp\/v2\/posts\/123844\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/rhn.ro\/en\/wp-json\/wp\/v2\/media\/65892"}],"wp:attachment":[{"href":"https:\/\/rhn.ro\/en\/wp-json\/wp\/v2\/media?parent=123844"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/rhn.ro\/en\/wp-json\/wp\/v2\/categories?post=123844"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/rhn.ro\/en\/wp-json\/wp\/v2\/tags?post=123844"},{"taxonomy":"thb-sponsors","embeddable":true,"href":"https:\/\/rhn.ro\/en\/wp-json\/wp\/v2\/thb-sponsors?post=123844"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}