Vyacheslav Ionitsa
According to the expert on economic policy of IDIS “Viitorul” Veaceslav Ionita, the model of real estate market functioning in Moldova makes it almost impossible to reduce prices for apartments.
According to him, in Chisinau in 2020, the price of 1 square meter of apartment in new buildings was 857 euros, and in old buildings – 645 euros. In 2023, prices increased in new houses to 1300 euros per square meter and almost to 880 euros in old stock houses. In the fourth quarter of 2024, prices were already 1585 euros and 1129 euros respectively. That is, over four years, prices have increased 1.9 times in new houses and 1.8 times in old houses.
In the structure of the real estate market in Chisinau, 53% are apartments, says Veaceslav Ionita. Individual houses in rural areas account for 22%; apartments outside the city – 18%, and individual houses in Chisinau municipality – 7%.
The dynamics of prices shows that from 2009 to 2016 they gradually decreased, and then the growth started. And in 2024 it reached the highest level in the last 16 years. The factors that caused this growth, Veaceslav Ionitsa calls the rise in the cost of labor and building materials. And due to the limited supply of new housing, the prices of old apartments have also increased.
The expert puts forward his version of the impossibility of price reduction in the foreseeable future. He notes that the main players on the Moldovan real estate market are construction companies, real estate agencies/agents and buyers. But the client buys an apartment not from a construction company, but from an agency. And pays the real market price, not the price at which the agency bought it back from the construction company at the planning stage. “The construction company sold apartments to real estate agencies 3-4 years ago at 600-700 euros per square meter, and today they sell apartments at 1600 euros per square meter. During this time, construction materials have risen significantly in price, hence the builders have incurred additional costs. In this regard, over the last 5 years, construction companies received 21.7% less money that went to real estate agencies (agents)”, – states Veaceslav Ionitsa.
According to the expert, in 2023, out of 463 million euros of apartment sales volume, construction companies received 374 million euros, and 89 million euros went to agents. In 2024, 201 million euros of sales volume was divided in the proportion of 156 million to 45 million euros. Thus, the share of agency income in sales volume increased from 19% in 2023 to 22% in 2024.
Veaceslav Ionitsa explained that after 2006 the prices for apartments grew slower than the cost of construction works. And only in 2024 the companies started the trend of exceeding the sales price of apartments over the incurred costs.
“Given these factors, there is nowhere for companies to cut prices today. The model of functioning of the real estate market does not allow this, otherwise developers will go bankrupt. Only the emergence of large real estate projects can restrain price growth,” Ionitsa noted.
He also calculated that to buy a new ready-made apartment of 70 square meters at the average salary level, a family in Moldova would have to work for 19.4 years in 2015 to accumulate the necessary amount. In 2020 this indicator was 14.5 years, in 2022 it increased to 15.1 years. At the end of 2024, it would take 14.9 years to save for an apartment.
“Although in 2024 apartment prices have increased the most in the last 16 years, given the increase in nominal wages, the affordability of buying an apartment remains about the same as in 2023. At the same time, 70% of all Moldovans’ income is invested in housing,” the expert summarized.
