Moldova’s Real Estate Market Faces Structural Crisis

When the market stops working automatically, another thing starts to happen: the market starts to be explained.

This is what is happening in Moldova today.

Since the beginning of 2026, the real estate market has suddenly become the central topic on the public agenda. Deputies, ministers, industry associations and individual economists synchronously started talking about the same thing: there is a “housing deficit” in the country, which is allegedly the main reason for the price increase.

The chairman of the parliamentary commission on economy, Radu Marian, has publicly stated that the key task is to increase the supply of housing and remove barriers to construction. The Minister of Economy, in an interview with TV8, stressed that the market situation is “changing slowly”, but prices remain stable and should stabilize through increased construction. Representatives of Uniunea Agențiilor Imobiliare, speaking to Moldova 1, emphasized the need to simplify real estate purchase procedures, including the expansion of possibilities to verify the origin of funds.

At the same time, initiatives to allocate public land for development, proposals to change the conditions of lending to the construction sector, and statements about the need to “unblock the real estate market” appeared in the public space.

At first glance, this may look like active work of the state and the industry.

In practice, it looks otherwise. This is not a sign of a healthy market. It is a sign of a market that has stopped functioning on its own.

The stage of denial: how the market starts to be “explained” when it stops working.

Radu Marian, chairman of the parliamentary commission on economy, said that the key task is to increase the supply of housing and remove barriers to construction.

Representatives of the Uniunea Agențiilor Imobiliare, on Moldova 1, emphasized something else: it is necessary to simplify the procedures for confirming the origin of funds – to extend the period from two to five years and to allow the confirmation of income by personal declaration under liability. This is presented as a technical improvement that removes unnecessary barriers. In reality, it is a systematic circumvention of the anti-money laundering legislation to the letter. The slogan “there are solutions if you prepare the dossier correctly” is a direct signal that standard methods no longer sell the market.

Entrepreneur Mircea Baciu, in an open letter to the Prime Minister, records a disastrous figure: in the fourth quarter of 2025, 999 apartments were sold – 78.5% less than in the same period of 2024. The market has lost four out of every five buyers in one year. At the same time, the average price per square meter in Chisinau reached 1720 euros by the end of 2025 – an increase of 650 euros in two years. Prices up. Deals down.

In his open letter, Mircea Baciu correctly diagnoses the symptom. But the measures he proposes – allocating state land for development, expanding credit to developers – work on the supply side, while the problem is on the demand side.

Despite the differences in wording, all public speeches in recent months have a common thesis: prices have risen because there is not enough housing. Politicians talk about the need to “increase supply.” Industry associations talk about the need to “remove barriers to transactions”. Individual economists talk about the need to “expand financing for the construction sector.” The construction industry talks about the need to “support developers”.

Thus, a single logical construction is formed: if prices have risen, it means that there is not enough housing; if there is not enough housing, it means that we need to build more.

This explanation is convenient. It is simple, clear and does not require analyzing inconvenient factors. But this very simplicity is the main alarming signal.

When virtually all market participants – politicians, developers, industry associations – begin to speak with one voice, it is not a sign of a healthy system. The history of economic crises shows that such a consensus emerges not at a moment of growth, but at a turning point. In the growth phase, the market does not need protection – it protects itself through profits. In the slowdown phase, the market looks for external sources of support: political, administrative, financial. This is exactly what we are witnessing today.

The whole current discussion is based on the supply side. But there is no answer to the key question: who is the buyer of this housing at the current price level?

This question is fundamental. The real estate market is determined not by the number of apartments built, but by the number of buyers able to buy them. If the buyer exists – the market works. If the buyer disappears, the market stops, regardless of the volume of construction.

History confirms this logic without exception. In the U.S. in 2006-2007, regulators explained that rising housing prices are “healthy dynamics” and at the same time simplified access to credit. In Spain in 2007-2008, developers assured that demand would not dry up before the construction boom took off. In China in 2021-2023, the authorities promised a “managed decline” in Evergrande until the very moment when there was nothing left to manage. In all cases, the public activity around the market increased precisely when the fundamentals were already turning downward. Moldova at the beginning of 2026 reproduces this logic with precision. The only difference is the scale – and the fact that Moldova has much less margin for error.

The surge of “expert activity” around the real estate market is not a sign of its health. It is a reaction of the system to changes in the conditions of its functioning. The market began to be explained precisely when it stopped working without explanation. And as long as the public discussion remains focused on secondary mechanisms – income verification procedures, construction volumes, credit conditions for developers – the fundamental question about the nature of the crisis remains unanswered. This means that the proposed solutions will inevitably work not with the cause, but with the symptom.

Structural crisis of the Moldovan real estate market: diagnosis

The main mistake of the current discussion is to consider what is happening as a “temporary distortion” that can be cured by administrative measures: give land, speed up permits, “unblock transactions”. This is treating the symptoms. The diagnosis is deeper: the market’s economic base has changed. It grew not because the population had more money, but because the credit mechanism of purchase expanded. When the real ability to pay stopped keeping up with the price, the market did not “fall beautifully”. It froze, it stopped

Real estate “keeps a face” in the listings. But the real estate market is not defined by price tags – it is defined by transactions. And this is where the failure is.

In the fourth quarter of 2025, 999 apartments were sold in Chisinau – 78.5% less than in the same period of 2024. At the same time, the average price per square meter exceeded 1700 euros. The market has lost four out of every five buyers in one year – and yet it is officially “stable”.

This is the structural freeze regime. Sellers don’t have to sell today – they can wait. Buyers can’t wait because there is no money. Not in the sense of absolute absence, but in the market sense: there is no sufficient flow of households capable of servicing a mortgage loan at the current price of a meter.

In the growth phase, the number of transactions and prices move upward together. In the phase of structural stagnation, they diverge: prices hold – due to inertia and unwillingness of sellers to fix the “minus” – and transactions disappear. It is this divergence that is the diagnostic sign of a fracture. Not falling prices. It is the disappearance of liquidity.

At the end of the year, the IMF recorded an alarming figure: housing prices rose by 24% from the end of 2024 to the middle of 2025. According to Global Property Guide, Moldova is among the leaders in Europe in terms of residential real estate price growth. It is impossible to understand the nature of this growth without understanding the mechanism that generated it.

When a bank issues a mortgage loan, it does not use someone’s savings. In the modern banking system, the bank creates purchasing power as an entry in an account: the loan generates a deposit, the borrower has a real debt that must be serviced out of real income. A “buyer with money” appears on the market – although behind this money is not wages or savings, but credit issue, i.e. the real money supply does not reflect the productivity growth of the economy.

The mechanism of price dispersal is simple. A seller sees a buyer with an approved loan and adjusts the price not to the real income in the city, but to the maximum amount the bank is willing to approve. The next seller looks at it and raises it even higher. As a result, the price of an apartment in Chisinau is detached from the cost of concrete, reinforcement and labor of the builder and begins to reflect only the ceiling of credit leverage.

The key formula of the Kishinev bubble: the price grew faster than income, because it was not the economy that was growing – it was the credit leverage.

Therefore, when a number of economists link real estate prices to wages, you want to twist your finger at your temple. Back in 2010, researcher Oleg Islentyev in his work at the Central European University showed that Moldova’s real estate market formed up to 40% of the country’s economic activity, acting as a compensatory mechanism for weak industrial and investment development. This meant that real estate became not a reflection of the economy – but its substitute. The credit leverage inflated this substitute to the limit.

The bubble exists exactly as long as banks continue to create credit entries. As soon as conditions tighten – it becomes clear that there is far less real money in the market than it appeared. This is exactly what is happening today. Not a construction crisis. Not a supply crisis. A crisis of credit expectations.

What role the state program Prima Casa plays in this, why the proposed market recovery measures are unlikely to work, and what really needs to be done to reboot the Moldovan construction industry and real estate market – in the following publications of Logos Press.