Why apartment prices have risen in Chisinau?

Do you want to buy an apartment? Are you monitoring apartment prices in Chisinau and have you noticed an increase in them? Wondering why? In this article we will list the factors that have influenced the rise in prices and what will be the trends for 2021.

At the beginning of 2020, there were a lot of contradictory opinions about the effects of the pandemic on the real estate market. Some predicted a collapse in apartment prices by the end of the year by at least 10-20%, while others said the real estate market would remain unaffected. 

Now, in 2021, in the middle of the year we can see an increase in apartment prices in Chisinau and the suburbs. The real estate market is one of the few sectors of the economy that so far have not suffered from the pandemic.

Remittances from abroad

During 2020, 1.49 billion USD were transferred from commercial banks - the largest amount recorded in the last six years. A large part of this amount sent by our fellow citizens working abroad has been invested in the purchase of apartments. Due to remittances sent from abroad, the demand for apartments has also increased.

Building permits

Although in 2020 more than 153 residential building permits were offered compared to 2019, the number of approved permits was not enough to cover the demand on the primary real estate market (apartments in new blocks of flats). 

Due to the fact that the number of issuing permits has been stopped right in the capital, we expect an explosion of new constructions in the suburbs of Chisinau in the coming years.

 In 2021, in the first semester there is an increase in the number of building permits issued, which will influence the stabilization of demand and supply, as well as apartment prices.

Rising prices for land lots and construction materials

Due to the fact that there are fewer and fewer good land lots for construction in Chisinau, their price has increased in recent years, influencing the increase in costs for the construction of new residential buildings. 

Likewise, on the construction materials market there is a major increase in prices, which in turn influences the construction and repair costs of both new and secondary residential buildings. 

Migration of the population from districts to Chisinau municipality

According to the data provided by the NBS (National Bureau of Statistics), there is an increasing migration of the population from the districts of the Republic of Moldova to Chisinau municipality. With the migration of the population, the demand for the purchase of an apartment in the capital or the suburbs increased.

CONCLUSION

Apartment prices in Chisinau have risen due to 4 major factors: an increased interest of Moldovans working abroad in buying an apartment in Chisinau and increasing remittances from abroad, building permits issued insufficient to cover demand on the primary market, the increase of prices for land lots and construction materials as well as the constant migration of the population from districts to Chisinau and suburbs.