The real estate market in the Republic of Moldova this year into a slow period. There is a stagnation of prices, decreases in the volume of sales and works. New real estate projects have fallen sharply. And next year the real estate market risks being in an equally bad situation. Statements in this sense were made by Veaceslav Ioniță, expert in economic policies at the Institute for Development and Social Initiatives (IDIS) “Viitorul”, on friday.
According to Veaceslav Ioniță, seven clear trends have emerged in the real estate field:
- There is a strong reduction in the number of houses put into operation, including in the municipality of Chisinau. The last time such a small number of homes, which were put into operation, was in 2014. One of the causes would be the fact that homes are checked more rigorously;
- Compared to last year, the volume of residential construction works was reduced by at least 35%;
- New real estate projects, have registered at least a 50% drop. Thus, the echo of the real crisis would be in 2023 when the real estate market will no longer offer new apartments;
- There was a sharp rise in prices, now there is a stagnation. After ten years of decline, in 2021 and 2022 they rose too suddenly, and now they have stalled, for half a year;
- The procurement of new apartments has decreased at least three times this year, and so did the significant real estate transactions;
- The appreciation of money has strongly discouraged the mortgage market.
- Currently, the number of people who have mortgage loans and buy apartments has decreased enormously, and those who have loans and buy new apartments has decreased even more. Many mortgages that are taken out are taken out for second-hand homes.
“Last year, the volume of construction works reached 8.6 billion lei in annual value. This year, at the end of the second quarter – 7.4 billion lei. This shows that the market is in stagnation”, noted the expert.
Veaceslav Ioniță also stated that in 2008 the average price of a square meter apartment was 867 euros. Now, it is, on average, 758 euros. For new apartments it is about 900 euros, and for second-hand ones – 690 euros.
“Moldovans buy about 20% new apartments, the rest second-hand. If in 2006 he had to work 43 years to buy an apartment, in 2020 it reached 9.9 years, and currently it is 10.4 years. We have a slight difficulty and it is related to the fact that the price of apartments has grown faster in the last two years than incomes”, explained the expert.
The economist also stated that in 2008 a family needed three salaries every month to pay the mortgage. In 2020 and 2021 – just one family salary. Now the burden has increased and it is necessary to take about 20% of the other salary of the family.
“Unfortunately, the construction industry is going through a rather deep crisis this year. The volume of work drops dramatically. Next year we risk having an even more difficult situation because new works are practically not being done this year”, concluded Veaceslav Ioniță.