Real estate market trends in 2023

By the end of 2023, the CasaHub team, in partnership with the real estate agency Romanescu&Co, prepared an analysis of real estate market trends in 2023, considering the dynamics of transactions and buyer preferences. Find out below.

Although data for the fourth quarter of 2023 has not yet been published, we are already seeing a situation wherethe number of transactions in the real estate market in Chisinau and its suburbs has decreased by approximately 70% compared to 2021.Despite this, prices continue to rise.

This year, price increases have been chaotic and with no signs of stopping. For example, on the periphery of the Buiucani sector in the Colina Residence complex, the price increase was almost insignificant - 3-5%, while just 500 meters from the Buiucani sector, on Ion Buzdugan Street, in the Exfactor complex, the increase was about 25% .

The factors that contributed to the different price increases in these two residential complexes are caused solely by subjective and emotional analysis in the process of searching for and purchasing an apartment.Also, clients are willing to pay 20% more for an apartment, provided that it is located 500 meters closer to the city.

This behavioral pattern among clients, choosing an apartment as close as possible to the main arteries of Chisinau's sectors at the expense of the suburbs, is the main reason why the city's suburbs are not popular, even if the ratio of transactions in these places has been constantly increasing since 2021.

If in 2021 in the first quarter the ratio of transactions in the suburbs compared to the city was 23% to 77%, then in the fall this figure was 32% to 68%.The change is not due to increased interest in the suburbs, but to a decrease in the number of construction projects. In 2021, 11,642 primary records of apartments in Chisinau and its suburbs were registered in ASP, but this year, by mid-December, according to official data, there are only 2,920 such primary records, and together with approximate data for the fourth quarter, this number will be about 4,700 primary entries, that is, 60% less in 2023 than in 2021.

From 2017 to 2020, 26 permits were issued for the construction of apartment buildings in Chisinau, while from 2020 to the present, 14 permits of this kind were issued.

One-room apartments in new buildings are leading the list of customer preferences this year.Their share in the total volume of apartments sold is about 45%. They are followed by two-room apartments with a share of 41% and three-room apartments with 14%.
At the same time, all these changes affected the timing of apartment sales. For the sale of apartments in the city, commissioned, with an area of ​​less than 60 sq. m. meters, the exhibition period does not exceed 7 days, mainly due to intense competition between investors involved in turnkey repairs. In the case of apartments with 2 and 3 rooms, the exposure period has increased due to rising prices.

Activity in the market for individual homes has noticeably decreased, and the boom associated with the post-Covid period has already passed. If in 2021 about 3 contracts per day for individual houses in Chisinau and its suburbs were registered in ASP, then in the third quarter of this year the average daily number of contracts decreased to one.

The dynamics in the land market are more optimistic, but still decreased compared to 2021.While approximately 20 lots were under contract per day in the third quarter of 2021, only about 5 lots are being sold daily this year.

Everything is clear on paper, but what happens in reality? There has been a change in customer behavior and preferences over the past 2 years. TOClients are now less interested in houses such as townhouses or duplexes and prefer mostly individual houses.

Among the main criteria for choosing a house are the presence of utility networks (sewage and central water supply), connection to the gas network (although alternative heating methods are becoming increasingly popular) and an asphalt road. Approximately 80% of clients have a budget of up to 150,000 euros. Within this budget, they are looking for houses that have already been renovated, without the need for investments or with minor ones.

At the same time, there has been a decrease in the number of mortgages for home purchases. More and more buyers prefer to pay in cash, which can be explained by the fact that many of them postponed the purchase decision for a long time and are now looking for capital investment options to protect against permanent devaluation.The top popular suburbs remain Durlesti, Truseni (Dumbrava), Tohatin, Bacioi, Stauceni, Cricova.

Conclusion

The real estate market in Chisinau and its suburbs is going through significant changes with constant demand for real estate in the city and a decrease in supply. These dynamics are driving up prices and re-evaluating buyers' preferences for property location. It is important to closely monitor these changes and adapt your real estate acquisition strategies in 2024.