The real estate market in Chisinau recorded the highest increase in the average price of apartments this year. In 2024, the average price increased by 470 euros per m2, an absolutely impressive increase.
Thus, at the moment, the average price of apartments is 1540 euros/m2 (all types of apartments in Chisinau and the suburbs are taken into account, both in new and old Soviet-style blocks, with repairs and in the white version).
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If in the first half of 2024, the increase in prices was fueled by the lack of stock of apartments for sale, then in the second half it was fueled even more by the cheaper mortgage loans and the launch of the Prima Casă Plus program.
In the first 3 months since the launch of the Prima Casă Plus program, over 1,000 families purchased a home through this program. This would mean approximately 15 apartments sold every working day through Prima Casă Plus loans alone.
If in 2023, only 20% of apartments were sold through a mortgage, then in 2024, this figure increased to over 40%. All those who could not afford to buy a home with cash practically entered the market this year, further increasing demand on the real estate market.
Analyzing the real estate market in Chisinau over the last 10 years, we can see how things have evolved, and how dynamic the last 5 years have been.
If over the 5 years, from 2015 to 2019, the average price of apartments increased by only 85 euros / m2, or approximately 17 euros per year, then over the last 5 years, from 2020 to 2024, the average price increased by 890 euros per m2, or an average of 178 euros per year.
Factors that have driven the increase in prices on the real estate market in the last 10 years
The real estate market is closely linked to the economic situation in the country but also in the region. In the last 10 years, the Republic of Moldova has benefited from a veritable snowball effect, generated by its rapprochement with the European Union and consolidated by a series of economic, social and political events. All this has contributed to the significant transformation of the real estate market and the increase in the well-being of citizens.
Signing of the Association Agreement with the European Union (2014)
- Increased trade with the EU
- Increased investment in infrastructure and European grants (increased general well-being)
- Free movement and easier access to the EU labor market (increased remittances from the EU)
Cheaper mortgages and launch of the “First Home” Program (2018-2019)
- Stimulating demand on the real estate market through better lending conditions
COVID-19 pandemic (2020)
- Increased demand for more spacious apartments, awareness of Moldovans to make a change to improve living conditions
“Real estate fever” of 2021
- Historic record sales on the real estate market (every Moldovan was thinking about investing in real estate)
- Moratorium on issuing construction permits in Chisinau
War in Ukraine (2022)
- Refugee migration and increased demand for apartment rentals
- Regional instability with a major effect on the increase in prices for construction materials
- Energy crisis and the increase in all prices
30% inflation (2023)
- General increase in costs, including for construction materials and services.
- Price adjustment on the real estate market, both for rents and sales.
Crisis in the stock of apartments for sale (2024)
- Reduction in the supply of apartments for sale
- Lower mortgage rates along with the reduction in inflation
- Launch of the Prima Casă Plus program.
CONCLUSION
The constant and sustained demand for housing in Chisinau has exerted considerable pressure on apartment prices over the past 10 years. How long this growth will last is very difficult to predict…
In 2015, the average price of apartments in Chisinau was 565 euros/m² and the average salary in the economy was 217 euros per month. The perception of Moldovans at that time was that prices were expensive. To purchase 1m2, 2.6 average salaries in the economy were needed.
Now, in 2024, the average price has exceeded the historical threshold of 1500 euros/m². It seems an excessively expensive price. But if we compare it to the current average salary in the economy of 717 euros (13700 mdl), only 1.9 average salaries in the economy are needed to buy 1m2 in Chisinau.
Question: When were apartments more expensive - in 2015 or now?
Author: Victor Cernomorcenco, Real Estate Specialist at Acces Imobil.
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