In 2019, there was a record number of transactions of sale-purchase of apartments in Chisinau as well as throughout the territory of the Republic of Moldova. According to the data provided by the Public Service Agency (ASP), the total number of sold apartments were 28,674 of which 22,187 apartments were sold in Chisinau.
Statistics shows that the total number of sold apartments in 2019 compared to the previous year is 40% higher.
The factors that led to the growth of the real estate market in Chisinau
Analyzing the information regarding the registration of immovable property and property rights offered by ASP, and also the socio-economic situation in country, we can list several factors that have led to an unprecedented growth of the sold apartments:
- lending conditions much more accessible to individuals
- increasing the accessibility of the apartments
- investments made by our fellow citizens living abroad
- investments made as a form of business
- population migration from rural regions to the city
Lending conditions more accessible to individuals
In 2019, commercial banks and other lending companies offered much better conditions for accessing a mortgage loan. Due to this fact, almost 9800 apartments were purchased through a mortgage loan, of which about 3500 apartments were purchased through the Program “Prima Casa”.
Thus, the rate of apartments sold through a mortgage loan is about 34%.
Increasing accessibility of the apartments
The another factor which influenced the real estate market in Republic of Moldova is the growth of the accessibility of the apartments due to the nominal increase of the salary in lei and the stable exchange rate of the lei against the Euro.
According to the National Bureau of Statistics in the third quarter of 2019, the gross nominal monthly average salary was 7385.0 lei, with an increase of 13.5% compared to the third quarter of 2018.
In this way, in 2019 the average annual salary recalculated in Euro increased by 600 Euro, from 3.9 thousand Euro annually in 2018 to about 4.5 thousand Euro annually in 2019.
If we make a calculation, to obtain a 2 rooms apartment of 60m2, which has a value of 39,000 euro (650 euro m2 - white version), approximately 8.6 average annual salaries is necessary.
Investments made as a form of business
More and more people are choosing to invest in real estate and make a profit in addition to their core business. We distinguish 2 major types of investors:
- investors who focus on raising capital - buy apartments in new blocks under construction at a lower price, and after commissioning, sell them at a higher price
- investors who focus on passive income - buy apartments with cash or mortgage credit and then rent them
Investors in the first category greatly influence the demand for new apartments, so in 2019 we also have a record of the apartments being put into operation.
But of according the State Tax Service in 2019 we have about 13 thousand lease contracts have been registered with the Tax Service Departments in the territory in which they are located.
Investments made by our fellow citizens living abroad
Many of our fellow diaspora citizens hope to return home at one day. And to have them come back they are buying a homes, and the most accessible and reliable way is to buy an apartment in Chisinau.
Even if they work in Europe and have decent salaries, it’s still difficult for our fellow citizens to buy a property there, the prices being very high. If we compare the selling price of one square meter in Chisinau with other capitals and big European cities, then we will see that the prices in Chisinau are much more accessible.
***
***
Let's analyze a family of Moldovans who work for 5-7 years abroad and have savings of 50,000 euros and want to buy a 2-room apartment with an area of 60m2, with repair and furnished in a new block and in good area.
In Chisinau, the price of such an apartment is: 60m2 x 900 euro / m2 (650 euro / m2 white version + 250 euro for repair and furniture) = 54 000 euro.
If we are make a comparison with the city Bologna in Italy, for a similar apartment of 60m2, where the price per square meter is about 3470 euros, a budget of 208 200 euro is needed.
So you need a budget about 4 times larger to buy the same home. It is precisely for these reasons that some of our fellow citizens invest in real estate in Moldova.
Population migration from rural regions to the city
The latest date provided by the NBS in 2014 shows that 56.6 thousand people have decided to change their place of residence in another locality in the country, of which every second person is from the rural area.
A positive migratory balance has the municipality of Chisinau, where in the last two years 16.6 thousand people and the city of Balti were displaced with living in other districts, where the number of arrivals exceeded 2.8 times the number of persons left.
Although there are no recent official data on population migration within the country, analyzing the socio-economic situation in the country we can say that this trend in recent years is increasing. Thus, the migration of people from rural areas to the city contributed to the increase in the number of apartments sold in 2019.
>>>
Do you want to sell or buy an apartment in Chisinau? Contact us at 078 888 900 or come to the office of Access Acces, Chisinau. bd. Grigore Vieru 12/1.
