Real estate demand in Moldova soars by 30%
Demand for real estate in Moldova has soared by about 30% in the last month of summer, according to experts. The increase is attributed to the return of citizens working abroad, who have decided to invest in a home. Others are also taking advantage of the opportunity to buy an apartment, after having delayed their purchase due to the pandemic, the war in Ukraine, and inflation.
In August, buyers became more active in the real estate market in Moldova, according to real estate expert Victor Cernomorcenco. He noted that this is a common phenomenon at the end of summer, but it is also persisting in September. Cernomorcenco also pointed out that prices for apartments have not increased in the first half of the year, but the high demand could lead to a slight increase in the cost of housing.
"We have a diaspora that returned in August, and this coincided with the fact that mortgage rates have also decreased from June to July. So, people who did not want to access a loan with 14% interest rates are more flexible with 8.5-9% rates. These are two factors that have influenced the increase in demand, but if we continue to have this demand in October, November, and December, then prices could increase by 5-7% by the end of the year. Right now, apartments in new buildings are in high demand because there are few of them. This is due to the fact that in recent years, not many construction permits have been issued," said Victor Cernomorcenco.
Last year, the real estate market was affected by the war in Ukraine and high interest rates, but it is now recovering, said economic expert Veaceslav Ioniță. However, another problem is that not only prices, but also the construction of new housing, stagnated in 2022, the expert said.
"This recovery is just beginning. In the coming months, I believe it will manifest itself in an increase in the number of transactions. Apartments will continue to rise in price, and this is very simple to explain. The price of apartments is correlated with wages, and considering that our wages in euros are rising, apartments will also go in that direction. We don't see it yet, but in 2024, we could have a slight discomfort due to the small number of new apartments that will be put on the market," underlined Veaceslav Ioniță.
According to data from the National Bureau of Statistics, about 3,400 construction permits for residential and non-residential buildings were issued last year, down more than 17% from 2021.
Real estate experts say that the average price for a square metre in a new apartment, in a white finish, is about €1,000 this year, and for one that is already furnished, it can exceed €1,300. By comparison, in old buildings, a square metre is on average €800-850.
Translation by Iurie Tataru
