In the first quarter of 2024, the highest housing price in the history of Moldova was registered, and this trend will continue in the medium term.
This was announced by Veaceslav Ionita, an expert on economic policy at the Institute for Development and Social Initiatives (IDIS) Viitorul, who analyzed the housing market in multi-storey buildings in Chisinau. He stated that in 2023, prices for apartments remained at the level of 2022, and in 2024 the market revived due to rising prices, but with a reduction in the number of transactions. In the first quarter, the highest housing price in the history of Moldova was recorded. At the same time, according to the expert, in the first quarter of 2024, a phenomenon occurred on the secondary market that had not been felt for the last 10 years: prices on the secondary market grew much faster than on the primary market. “Apartment prices have risen sharply, people are now inclined to buy on the secondary market,” notes Veaceslava Ionita. According to his data, the cost per square meter in Chisinau in new housing stock increased from 857 euros in 2020 to 1,434 euros, and in old housing stock - from 645 to 972 euros over the same period. There is also a new trend towards the purchase of ready-made apartments. The expert conducted a retrospective: in 1995, 1 m2 of apartment in Chisinau cost 137 euros, in 2005 – 520 euros, in 2017 – 533 euros, in 2023 – 1010 euros. “Today, about 70% of apartments sold are from the secondary market, the remaining 30% are apartments in new buildings. Just in 2022 prices reached the level of 2008. In 2023, prices remained at the level of 2022, and in the first quarter of 2024 there was a revival of the market and the maximum price of apartments in the history of Moldova was recorded,” the economist emphasized. He also analyzed the availability of bank loans for the purchase of housing. The average interest rate on real estate loans for individuals decreased from 16.6% in 2008 to 9.7% in 2014, then it increased in 2015 to 13.1%, and in 2021 it decreased again - to 6.7%, in 2022 it reached 12.8%, in 2023 – 8.8%, and in the first quarter of 2024 it amounted to 8%. “Since 2016, mortgage loans have become more accessible. The best situation was in 2019. But with the tightening of the monetary policy of the National Bank amid the crisis in 2021 and 2022, the situation worsened by 2022. This made it impossible for families to access a mortgage loan. Now there is a tendency towards an increase in the population’s income, a decrease in the interest rate on bank loans,” said Veaceslav Ionita. According to his calculations, today the family must spend 74% of its income to repay a mortgage loan (he gives an example of a family of 2 working adults who took out a loan for 20 years to purchase a 1-room apartment with an area of 70 sq. m.). For comparison, in 2008, 314% of a family’s monthly income was spent on repaying a mortgage loan, in 2011 – 177%, in 2021 – 70%. The average annual salary in Chisinau in 2024 is expected to exceed 10.4 thousand euros for the first time (in 2023 - 8950 euros, in 2021 - 6290 euros, in 2000 - 575 euros). The expert states that the affordability of housing in Chisinau is growing from year to year, and today 10 annual salaries will be required instead of 34, as in post-Soviet times. For comparison, buying a home in Rome requires 7.2 annual salaries, in London - 8.5, in Budapest - 10.3, in Prague - 14.3 annual salaries in this city. Veaceslav Ionita notes that housing prices are directly related to the cost of building materials and the income of the population. However, despite high prices, housing is becoming more affordable and the market is in balance. According to his forecasts, after too sharp a rise in prices, a short pause is possible, but in the medium and long term, apartment prices will rise in proportion to the growth of wages.// 14.06.2024 — InfoMarket.
