In 2017, we are witnessing a recovery in the construction industry since the crisis last year. In the first two quarters there is an unprecedented revival of the commissioning of the apartments and most probably this year we can reach the number of 8000 apartments - the highest level from the independence of the Republic of Moldova. This is the opinion expressed by the economist IDIS Viitorul, Veaceslav Ionita in the show "15 minutes of economic realism".
Data from the National Bureau of Statistics shows that in the first half of the year we have an unprecedented increase of 34% in the dwelling of 4100 dwellings. If we look at apartments, the increase is even higher than 64%, at 3654 apartments in half a year. This rise has raised several questions about the direction of the construction industry.
Economist Veaceslav Ionita argues that in 2017 we are witnessing a recovery of the construction industry after the precarious situation in 2016 when the sale of flats has experienced a sudden fall, according to the Cadastre data. If there were 15,200 sales annually by mid-2016 - a steady figure, then in the third quarter we witnessed a collapse of the property market linked to two factors. The number of purchase contracts dropped to almost 4,000 quarterly to 1940, and the mortgage practically disappeared, reaching 140 times a quarter compared to 1,500 contracts as previously.
In 2016, we witnessed a crisis in the real estate market and was dictated by the negative perception of the citizen. Moreover, the number of those who bought apartments from their own money has fallen, but not so dramatically compared to those who bought out of borrowed money. Thus, people who intended to buy and had money did not change their purchasing decision, they were waiting, and those who intended to buy apartments from borrowed money preferred to postpone the purchase because of the uncertainty. The collapse of demand for apartments and the number of citizens to borrow led to the largest decrease in the number of apartments in operation. If in the year 2015 the third quarter of the year reached 6250 apartments, then in the similar period of 2016 the figure was 4,500 apartments. Later, in 2017, a recovery began on the background of changing the perception of the citizen, reviving the mortgage.
"We are currently undergoing a reformation of the real estate market, a revival of the market and the bankruptcy of several uncompetitive companies. In the years to come, we will witness the completion of projects started ten years ago. Prices will be kept at a fairly low level as developers will have to get rid of illiquid assets. At the same time, there will be a revival of the consumer demand on the background of demand driven in 2016", Ionita concluded.
The show is made by IDIS Viitorul in partnership with Radio Free Europe.
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