Vyacheslav Ionice
The expert became interested in this issue because it’s not just apartments in new buildings that are getting more expensive in the capital. Prices on the resale market are also rising in tandem with them.
Ionice attempted to analyze this phenomenon.
Like Two Vessels
Many people understand why new apartments become more expensive when the prices of cement, metal, glass, energy, or labor rise. But a natural question immediately arises: why are older apartments becoming more expensive as well? What does an apartment building constructed 40 years ago have to do with today’s prices for rebar?
An analysis of the last 30 years shows that the connection is direct and very strong. The market for new apartments and the market for older apartments function like two interconnected vessels, the analyst asserts, highlighting two factors that link these markets.
The first factor: the conversion rate
Most buyers of new apartments do not bring money from abroad. They sell their old apartments to buy new ones.
In the Republic of Moldova, the ratio between the two markets has stabilized in recent years at approximately 1.5 m² of older apartments for every 1 m² of new ones.
In other words, to buy 100 m² in a new building, an owner must sell approximately 150 m² on the secondary market or cover the difference with savings.
Therefore, when new apartments become 10% more expensive, owners of older apartments also try to raise their prices. Otherwise, they cannot make the necessary upgrade to improve their living conditions.
This is the mechanism that passes price increases from the primary market to the secondary market.
The second factor: the substitution effect
During periods of turmoil, an even more interesting phenomenon occurs.
Suppose a buyer intends to purchase a new apartment, but prices are rising sharply.
The buyer has three options: buy a new apartment anyway; postpone the decision; or give up on the new apartment and buy an older one.
The third option is the one that changes the market.
When thousands of potential buyers simultaneously shift from the primary market to the secondary market, demand for older apartments rises sharply. As a result, older apartments can even become more expensive than new ones.
That is why, during periods of rapid growth, we often observe a seemingly paradoxical phenomenon: if new apartments rise in price by 10%, older ones may rise by 12–14%.
This phenomenon also works in the opposite direction
When prices for new apartments stabilize or even begin to decline slightly, some buyers who had previously turned to the secondary market return to purchasing new apartments.
As a result, demand for older homes declines, and their prices stabilize or even fall faster than in the primary market.
Perhaps it’s not the apartments that have become more expensive, but money that has become cheaper
There is another aspect that we often overlook.
When we compare today’s prices with those from 10, 15, or 20 years ago, we get the impression that apartment prices have risen significantly. In reality, a significant portion of this increase is due to the depreciation of money.
An interesting example shows that a typical apartment of about 70 m² in Chisinau today costs roughly 1 kilogram of gold. With the rare exception of periods of crisis or euphoria, this correlation has held up surprisingly well over time.
In other words, apartments don’t always get more expensive. Sometimes our money loses its value.
What the global markets say
We decided to verify the Moldovan economist’s calculations.
Apartments in Chisinau have more than doubled in price over the past 10 years. While the average price in 2015 was around €565 per square meter, by 2026 prices had steadily surpassed the €1,700 per square meter mark.
At the same time, global gold prices have more than tripled over the past 10 years. In mid-2015, a troy ounce was trading around $1,160, and by mid-2026, its price was fluctuating between $4,150 to $4,200 after reaching all-time highs of over $5,600 at the beginning of the year.
In percentage terms, the precious metal has risen in price by more than 220–330% in dollar terms.
In other words, there is some merit to the Moldovan economist’s calculations. However, it is worth noting that in Moldova, the authorities—in deference to the banks—do not promote other forms of investment—ranging from gold and works of art to cryptocurrencies—which deprives the country’s citizens of choice.
Attempts were made. There were times when it was possible to buy investment gold in Moldova, and when attempts were made to launch the first Moldovan blockchain token…
However, in the end, all of this was blocked, and apart from deposits—which benefit only the banks—and government bonds—which serve the authorities’ interests—there are still no other opportunities in the country to invest spare funds.
