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Posted by: Ecaterina Arvintii
News / Economic
18 July 2020 / 13:33
The real estate market in Moldova, in free fall
The real estate market is in free fall. After a dizzying development in the last two years, apartment sales have plummeted by almost 40 percent recently. At least, this is revealed by an analysis carried out by the Institute for Development and Social Initiatives "Viitorul", and the main reason would be the crisis caused by the COVID-19 pandemic. While developers are trying to adapt to the financial possibilities of Moldovans, experts are also coming with good news. During the summer, when many compatriots return from abroad, the situation could return to normal levels, Moldova 1 reports.
From April to June, just over 4,000 families moved into new homes, while in 2018-2019 almost 30,000 apartment transactions were registered, an absolute record for the Republic of Moldova. Real estate agents are finding it harder and harder to find buyers, and the price of some homes has dropped.
"Even in the pandemic, our company had very few transactions. If, for example, before, monthly, each agent had four or six transactions, then during the pandemic in two months about ten apartments were sold in total. For the most part, sales are now being made in new blocks with repairs. There are very few with the white version and it is very difficult to find them," says the real estate agent, Anton Popa.
Due to lack of money, Moldovans are increasingly turning to bank loans. Thus, last year almost ten thousand apartments were purchased in mortgages, of which 20 percent through the state program "First House".
According to an analysis by economic expert Veaceslav Ionita in Chisinau, the value of apartments has decreased by 4.5 percent compared to the second quarter of last year, and the average is now 509 euros per square meter.
"It would be fair to say that they lowered the transaction price, not the price of apartments. The new apartments cost from 500 to 800 euros per square meter, so they remained to cost. Citizens prefer cheaper apartments," says Veaceslav Ioniţă.
Some of the people I spoke to say that although they have had some financial difficulties caused by the pandemic, buying an apartment is a matter of time.
Recently, the Government expanded the list of people who can benefit from a loan through the "First Home" Program. Thus, the age limit was increased for people who can access the program from 45 to 50 years. In the two years of implementation of the Program, 4,296 people, including young families, have already benefited from partially state-guaranteed mortgages. The total amount of credits granted by banks amounts to over 2.1 billion lei.
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