The real estate market in Chisinau registers a stabilization of apartment prices on both the primary and secondary markets. Starting with March of this year (2022), apartment prices no longer increase as they have in the last two years (2020-2021), when prices have risen sharply by 30-50 euros per square meter every quarter.
In the last 4 months (March-June 2022), apartment prices have stabilized at historic highs. So at this point we have the following average prices:
- 900-1000 euro / m2 (apartments in new blocks of flats in the white version)
- 1000-1200 euro / m2 (apartments in new blocks with repair)
- 870-920 euro / m2 (apartments in old blocks of flats)
It should be mentioned that the above prices are the general average, and each apartment needs to be evaluated separately taking into account certain criteria such as: location, construction company, type of repair, ergonomics and floor plan, floor, adjacent infrastructure, etc.
Factors that contributed to price stabilization
The increase in prices in the last two years was dictated by the high demand from Moldovans to buy a home for personal use but also for investment purposes.
On the other hand, we had a whole basket of factors that contributed to the increase in apartment prices in a short period of time, such as:
- Cheap Mortgages, First Home Program (first installment of only 5%, APR 6-7%)
- increasing the average salary in the economy
- population migration from districts to the capital
- constant flow of capital sent by our compatriots abroad (a large part of the money was invested in real estate in Chisinau)
- rising prices for construction materials and land
- record inflation of 25-30% etc.
On the other hand of the balance, at the moment we have several factors that tempered the demand for apartments and with it and contributed to balancing prices:
- mortgage % increase (currently the first installment of 30-40%, APR 10-12%)
- the purchasing power of the population decrease (due to rising prices for consumer goods and energy resources)
- reluctance to invest in the long term (due to the military conflict in the region)
- exaggerated real estate prices, etc.
How will the real estate market evolve by the end of the year
Inflation and the regional situation are the key factors that have a major impact on uncertainty in the real estate market. Unfortunately, we do not have much influence on things in this area, all we have to do is wait for economic stabilization at regional and global level.
The rise in mortgage prices and the high indebtedness of the population could have a major negative effect. If there is no concrete mechanism from the aid authorities for people who will no longer be able to pay their mortgage payments, we could wake up with an avalanche of low-priced real estate on the market in the next period.
Even if it is difficult to predict how things will evolve on the real estate market, based on the analysis of the above factors, we can expect a correction of prices by a maximum of 5-10% by the end of 2022.
Those who will be motivated to sell will have to adjust prices so that they can find a buyer.
P.S. However, a good news that could counterbalance supply and demand, as well as real estate prices, is that the Republic of Moldova has obtained the status of a candidate country for EU membership. Even if this novelty does not mean a radical change in the short term, it is still an unknown that could bring more benefits and a positive impact on the long-term development of the real estate market in Chisinau.
But how do you think real estate prices in Chisinau will increase or decrease in 2022?
Author:
Victor Cernomorcenco, Real Estate Specialist within the company Acces Imobil.
Important!
The copying of the materials from the page www.accesimobil.md can be done in the maximum limit of 500 characters with the indication of the source through hyperlink.
