The number of people purchasing new apartments has decreased amid inflation. The experts' explanations
The volume of construction works decreased by more than 26 percent during the months of July-September 2022 compared to the similar period last year, according to data from the National Bureau of Statistics. While economic experts say fewer businesses are investing in real estate construction due to inflation, construction experts say the number of apartments being built has also decreased.
The number of apartments and houses decreased by over 26 percent, in the months of July-September this year compared to the same period last year and of non-residential buildings with 28 and engineering constructions over 18 percent, according to NBS data. Currently, the number of people purchasing a new apartment has decreased due to inflation, due to the exchange rate and monetary policy, claims the expert in economic policies, Veaceslav Ioniță. "Sales of new apartments have fallen quite sharply, the price has capped and respectively, investments have slowed down. The National Bank tightened the lending policy and as a consequence, the volume of mortgage loans decreased 3 times. Homes are sold in foreign currency. The euro depreciated strongly against the leu by at least one leu, and construction prices increased by 40 percent. This year, the income for one m2 in an apartment is 120 euros lower than it was last year. It is the biggest decrease in the last 30 years". Due to the fact that the volume of construction work has decreased, some builders could be left without a job, the president of the Employers' Federation of Road Builders and Construction Material Producers, Pavel Caba, told Radio Moldova. According to him, because of the war in Ukraine, the prices of some construction materials have doubled. "We are talking about the three-fold increase in the price of metal, the two-fold increase in cement and other materials that are used to build buildings. These increases started in August last year. But, with the war in Ukraine and the intensification of the respective crises, these increases have intensified and are not decreasing. The effects are negative. Jobs are being lost." According to the National Bureau of Statistics, in the period from January to September 2022, compared to the same period of the previous year, the volumes of investments in engineering constructions decreased by about 25 percent, and in residential buildings by almost 12 percent.
