In April, some experts started talking about the real estate market again – with figures, diagnoses, discoveries. They explained to us that investors had “disappeared”, that 70% of transactions now go through mortgages, that the market was “resetting”. All of this is presented as fresh analysis. In reality, it is a description of symptoms without a diagnosis. The market is not resetting. It’s deflating. And that was predictable.
Back at the beginning of the year, when the IMF recorded a 24% price increase in six months and recommended that Prima Casa be phased out, the picture was clear: the state has been pumping artificial demand into the market for years, and now it pretends that what is happening is a market correction. It is not a correction. It is the natural end of a credit bubble that was inflated deliberately.
The mirror doesn’t lie. It just shows the person who looks into it. And in Moldova, the mirror is looking at an economy without internal demand, without sustainable income and with a state that built illusions instead of institutions.
“Prima Casă” was not a housing support program. It was a price support program. The mechanism is simple and cynical: the state guarantees the bank up to 70% of the loan, the bank gives it to a family with a salary of 10 thousand lei, the family takes an apartment for 100 thousand euros, hoping that “the son from Italy will send it”. The seller sees the queue with approved loans and raises the price. The next seller – even higher. So for ten years a square meter in Chisinau has grown from 900 to 1700 euros with an average salary of 900 euros a month.
There was no market miracle. There was a credit issue, shifted on the shoulders of families and the state budget. The price per meter did not reflect the cost of concrete and labor – it reflected the ceiling of what the bank was willing to approve. And the bank was brave because the state vouched for it.
The IMF saw it. The National Bank saw it. The Ministry of Finance saw it. They kept silent because the construction sector paid taxes, created jobs and financed the right people. Admitting the bubble means admitting that Prima Casa was not help for young families, but gasoline for the fire. Politicians do not like that, especially on the eve of elections.
Why “investors” disappeared
To talk about “disappearance of investors” as a market phenomenon is to deliberately miss the main point. Investors did not leave because the market cooled. They left because it became dangerous to explain where the money came from. Tougher background checks, cash restrictions – this is not a market correction, it is a belated institutional filter. It should have worked from the beginning. What it has worked now is not reform. It is cleaning up after a fire while simultaneously explaining that there was no fire.
What’s left in the market are end buyers who just want a roof over their heads. They don’t gamble on growth. They take out a twenty year mortgage, hoping that income doesn’t fall, remittances from Europe don’t dry up, and the bank doesn’t change its mind. To call 70% of mortgage deals “market civilization” is a cruel irony. It is a signal that the economy has run out of free money. Housing is no longer the result of savings – it has become a test of debt endurance.
Half-measures won’t work
While the market is deflating, the state has made two characteristic moves. The first one is that it stopped Prima Casa. The Minister of Finance said frankly: the program pressures the budget and the market. True. But he did not say why it was pressurizing. And it was because it was an instrument of imitation of the housing policy: it subsidized the demand instead of creating conditions for a normal supply. Prices rose, affordability fell, and the budget paid twice. Now the program has been closed – and rightly so. But closing a crutch without creating a leg is not reform.
The second movement is the law on realtor certification. Starting January 2027, mandatory certification, agent registry, and a ban on hidden fees. Sounds reasonable.
But the detail is indicative: control over the market and certification are transferred to the Agency for Geodesy, Cartography and Cadastre – the same structure whose lack of transparency in the register of transaction prices was one of the main tools of information asymmetry in the market. Strengthening the role of the agency without changing its nature is not an institutional reform. It is a rearrangement of furniture in a burning house.
An institution is not paper. It is an environment in which the rules work even when you are not being watched. Moldova does not have such an environment. Therefore, any reform on paper remains on paper.
There are fewer transactions and prices are still high. They explain to us: the cost of production is high, housing commissioning is low, developers do not want to fix losses. Technically true. But there is something more important behind it: in Moldova there is no mechanism that would make prices adjust to the real demand. There is no public register of prices of actual transactions – only announcements. There is no accountability for the manipulation of valuations. There is no environment in which the market could honestly find equilibrium.
As a result, the market “keeps its face” in the announcements while real liquidity evaporates. This is not stability. This is information asymmetry against the backdrop of an institutional vacuum. And as long as this vacuum exists, talks about “market normalization” will remain talks.
The real estate market is not the engine of the economy. It is its indicator. If there are no stable incomes in the economy, housing goes into mortgage bondage. If institutions are weak – the market is filled with non-transparency. If the state stimulates demand for years instead of building the environment – prices are higher than the population can afford, and the budget pays for the illusion of affordability. All these processes can be seen at the same time.
No realtor certificate, no closing of “Prima Casa” and no “market reset” will change this. Only one thing will change it: normal institutions. A transparent public register of real transactions. A protected buyer. Predictable rules. A state that does not stimulate, but creates conditions.
As long as it’s not there, the mirror will show the same thing. And every year it’s more and more clear.
Dmitri Tereburke,
expert in real estate development and valuation
