Mircea Baciu
To make the situation even clearer, it should be noted that this is not a specific feature of the first quarter, as the same period last year saw an increase of 18.7%.
The Republic of Moldova ended 2025 with a significant growth of 24.3% in the last quarter, while just a few months later a significant decline was recorded. The construction market has started to collapse amid a downturn that has been two years in the real estate market.
Market collapse and consequences
This market has declined by 84% in two years. In the first quarter of this year, only 623 apartments were sold in and around Chisinau, compared to 2,884 in the same period of 2025 and 3,993 in the first quarter of 2024.
And all this is happening in conditions when the demand on the real estate market, according to some estimates, exceeds the supply by about 30%.
But let’s return to the data published by the National Bureau of Statistics on the construction market in the first quarter of this year.
It should be noted that the decrease is observed in the most important segments of the market: new buildings – by 7.1%; repair and maintenance works – by 13.1%; capital repairs – by 23.5%.
Growth by 5.2% is observed only in case of such works as demolition of buildings and development of land for construction.
Further reduction in the volume of construction works, along with the increase in real estate prices predicted by some experts (as a result of the expected introduction of the so-called carbon tax, rising inflation, increasing labor shortage and its cost, etc.), will make housing even more unaffordable, which will directly affect citizens.
Thus, it is clear that vigorous and swift action is needed to prevent the situation from spiraling completely out of control. In this regard, I will recall my vision in this regard, which I published earlier.
Balanced and comprehensive solutions are needed
The measures to which Moldova can resort are within the competence of both the city administrations and the Government.
The first measure, which is within the competence of city administrations, is the auctioning of small land plots (0.5 ha). For this purpose, city administrations should form a reserve of city lands, divide them into plots of 0.5 ha and organize open auctions. Only legal entities and individual enterprises with proven construction experience ≤ 10,000 m² should be allowed to participate.
As a result, the monopoly of large developers will be eliminated; small and medium-sized construction enterprises will be attracted to the market; the supply and diversity of projects will increase.
Another necessary measure is the elaboration and adoption of new urban development plans with the sale of plots on the outskirts of cities or in municipalities.
As a result, we will get the reclassification of agricultural land in the suburbs into residential areas; allocation of large neighborhoods that will be divided into sections for different developers, but with a unified infrastructure plan.
In this way, the shortage of land in the city center will be reduced; land prices in the center will be limited; demand will be redistributed.
Another necessary measure is the creation of new neighborhoods with turnkey infrastructure. City authorities could build roads, communications, social infrastructure facilities (schools, kindergartens, medical centers) themselves or jointly with investors before the construction of housing.
As a result, the attractiveness of suburbs would increase; young families would get affordable housing with developed infrastructure.
It is also necessary to simplify and speed up the issuance of building permits. This will reduce bureaucratic barriers and the time required for a developer to start work, while maintaining quality control and compliance with urban planning norms.
At the state level, the First Home program needs to be modernized and restarted. In this regard, it is necessary to: limit participation only to the purchase of housing with an area of up to 100 m² and a price not exceeding the established limit; give priority to families with children and young professionals, etc.
Another measure could be the introduction of a tax on quick resale (following the example of Ukraine). It could be set at 6-10% of the value of real estate owned for less than three years.
As a result, speculative transactions would be reduced and the market would become more stable. This tax would be temporary – for example, for three years.
Another positive measure could be the launch of joint projects between the state and developers within the framework of public-private partnership.
Thus, housing construction with state participation would be stimulated, which would accelerate the expansion of supply and ensure socially affordable housing without overheating the market.
If these measures are implemented, the following results will be achieved within 3-5 years:
– Price growth will stabilize at 3-5% per year (instead of spikes of 15-30%);
– the share of speculative transactions will decrease by 20-30%;
– 10-15 new developers from the small and medium segment will enter the market;
– the share of new neighborhoods in the sales volume will increase from 5-7% to 20-25%.
Mircea Baciu,
entrepreneur from the Republic of Moldova
