OREANDA-NEWS. July 22, 2010. According to the experts of the Real Estate Agency LARA, in January-June 2010 the average price at the market of primary residential real estate amounted to €600 or by 15% less than in the same period of 2009. During this period the Chisinau market of primary residential real estate got narrowed considerably.

There are several reasons for this slump: economic crisis; huge budget deficit in 2009; low purchasing power of the population; reduction of remittances from migrant workers against 2007-2008; high loan interest rates; absence of confidence of both financial institutions and population in building companies because of non-feasance or low-qualitative and expired meeting of obligations; high growth of public facilities rates; unstable political situation in the country.

According to the experts of LARA, the customers, who desire to invest funds in the real estate, are very popular among the operators of real estate market and respected by the sellers. In this situation such tendency when the customer dictates its terms to the market is quite obvious. The real estate market can’t always be on the rise as it’s abnormally. In Moldova it had been at the peak for almost 4 years thus the slump was inevitable irrespective of economic crisis. Currently, the population of Moldova is practically provided with housing by 95%. However, the majority of housing fund was built in the years 1950-1980 and thus is of low consumer quality, and some part of buildings is under the threat of collapse.

The construction companies, deprived of lending possibility, extract themselves by various means: some suspended the building, the others reduced the cost of their services, attempting to attract the customer. There is also a small group of construction companies that operates at the expense of owned funds and not of loan proceeds. This category suffered least of all and continues to work successfully with the perspective of income earning in the future.