The real estate market in Chisinau is going through a crisis already for the second consecutive year, the total number of apartments sold in 2022-2023 decreased by 40%. The official figures show us that in 2022 and 2023 we have around 14,800 apartments sold in Chisinau and the suburbs.
This major decrease in the number of transactions on the real estate market in Chisinau is primarily caused by the war in Ukraine, the unprecedented inflation of just 35% and the psychological and economic climate not quite suitable for long-term investments.
If we analyze the last 7 years, we can see that the real estate market in Chisinau had a period of constant growth in the number of transactions over a period of 5 years from 2017 to 2021. Year after year, a new sales record was registered and the real estate market had gained unprecedented momentum.
Factors that contributed to the increase in the number of transactions on the real estate market (2017-2021):
- the end of the period of stagnation on the real estate market (year 2017)
- the launch of the First Home program and the heating up of the real estate market (2018)
- the accessibility of mortgage loans by simplifying the granting conditions (2019)
- covid 19 pandemic (2020)
- real estate fever (2021)
We can see how the TV news and the massive advertising of mortgages contributed to heating up the real estate market. Later, Moldovans found themselves locked in their homes due to the Covid 19 pandemic, and this motivated them even more to go out on the market and buy real estate that would improve their living conditions.
Along with the increase in the number of sales-purchase transactions, the average price of apartments also increased, so that in 2023 a historical record of 1030-1050 euros per m2 was recorded (all types of apartments in Chisinau and the suburbs are included (new block/ old, in the white version or with repair, under construction or data in operation).
The factors that contributed to the decrease in the number of transactions on the real estate market in Chisinau (2022-2023):
When everything seemed obvious and more and more buyers were on the market, in 2022, a new black swan came - the war in Ukraine - which negatively affected the real estate market in Chisinau.
Also then, we had an unprecedented inflation of exactly 35%, with Moldovans focusing on current expenses and less on long-term investments.
Two years in a row, Chisinau has registered a number of approximately 14,800 apartments, 40% less than in 2021. We have practically returned to the level of the number of transactions from 2017-2018, the years before the "explode" the real estate market.
Where is the real estate market in Chisinau headed in 2024?
It is very difficult to predict where the real estate market is going. It is affected by many internal and external economic factors. We do not know how the war in the neighboring country will end. We don't know if there won't be another black swan in the near future.
What we can see is the fact that mortgages got cheaper in the second half of 2023 and they are going to get cheaper. All those who postponed the decision to purchase an apartment due to lack of financial resources will return to the market.
The construction of several new housing complexes in Chisinau and its suburbs has recently been announced. Investors who recently had nothing to invest in will now have the opportunity to buy apartments at the construction stage.
In the same way, we hope that the start of the negotiation talks on the European path of the Republic of Moldova will bring security and a much better perception of the Moldovans in the good future. Why not, let foreign investments come to help us create more well-paid jobs as well as for infrastructure development.
P.S. In 2023, 15,197 apartments were sold in Chisinau and its suburbs, with 5.1% more transactions compared to 2022.
Author:
Victor Cernomorcenco, Real Estate Specialist within the Acces Immobil company.
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