In 2023, 3,979 apartments were purchased through mortgage loans in Chisinau and its suburbs, 77% more transactions compared to 2022.
However, the real estate market in Chisinau is going through a deep crisis, in the years 2022 - 2023, approximately 40% fewer apartments were sold compared to 2021.
The real estate market was greatly affected by the war in Ukraine, it upset the psychological and economic security of Moldovans.
Another important factor that negatively influenced the real estate market in Chisinau is the unprecedented very high inflation of about 35% that we had in 2022. This fact influenced the price of mortgage loans, the APR increased from 7-8% to 14%.
In 2022 we had only 2,248 apartments sold with a mortgage, a drop of just 65% in the number of properties sold with a mortgage compared to 2021.
In 2023, we had 3979 apartments sold through mortgage credit. A revival was observed in this segment. In the second half of 2023, mortgage loans became cheaper with the decrease in inflation, and Moldovans who postponed the decision to buy a home due to expensive loans began to return to the market.
If we analyze the official statistical data, we can see that in the years 2017-2021 approximately 35-40% of all sales-purchase transactions were carried out through mortgage credit, while in 2022-2023 the average is only 21%.
If we compare the data from the Republic of Moldova with those of a much more developed country such as Germany, we will notice that there 80-90% of the total number of transactions are made through mortgage credit.
The only explanation for this gap is the fact that Moldovans can afford to buy real estate with cash, while in Germany without resorting to a mortgage it is simply impossible, due to the very high prices (even if the population's income is much higher as big as the Moldavians).
How will the cheapening of loans affect the real estate market in Chisinau?
If the trend of cheaper mortgages continues in 2024, it will positively influence the demand for apartments in the following period. Several Moldovans who postponed the decision to buy a real estate will return to the market.
It is very important to take into account that the average wage per economy in the Republic of Moldova in 2023 was 11,700 mdl, the equivalent of 594 euros, and this had a positive influence on the accessibility of apartments for Moldovans despite the ever-increasing prices.
Author:
Victor Cernomorcenco, Real Estate Specialist within the Acces Immobil company.
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