CHIŞINĂU (Imedia) - The volume of construction of houses in Moldova has fallen in the first trimester of the year by 37.5 percent compared to the same period last year, says the National Bureau of Statistics (NBS). This is the largest drop registered in the last ten years.  

Consequently, experts have been wondering if the constructions crisis has been deepening. Their pessimism seems justified if we take a number of other market indicators into consideration. Investments in constructions have fallen by 28.6 percent. Official statistics show that the volume of new constructions business numbers has fallen to 71.8 percent of the level from last year, including for residential constructions (61.2 percent compared to last year) and non-residential constructions (62.8 percent).

Commentary:

Dragos Hincu: The real estate business seems to be recovering despite a decrease in the construction of living units

„Even if statistics show a decrease in living unit construction, sales have actually gone up and have now reached pre-crisis levels," says Dragos Hincu, head of Elita-5 Holding's real estate and marketing department.

Mr. Hincu adds that „there are some signs of a revival of the real estate market. There is a lot of interest in new houses considering the fact that now there are fewer active constructions than before the crisis. Part of the projects have been frozen because of a lack of liquidity. „Clearly, potential buyers, when they see construction sites that aren't working, will not be interested, and most clients will direct their attention toward active constructions with a high degree of finalization or ones that are close to being released for use."

Mr. Hincu concludes that „before the crisis the number of active constructions was rather large and you used to have a choice. Now, however, demand nearly matches supply."

Nicolae Ostafeiciuc: The decrease in the level of constructions is a shock  

Nicolae Ostafeiciuc, a real estate expert with LARA real estate, says that „the decrease in the level of constructions is a shock for those who have invested money because they now don't have an apartment or money."

As transfers from abroad have decreased, so have investments in real estate, Mr. Ostafeiciuc explains. He adds that some Moldovans are refraining from buying apartments because they do not have enough money, while others are not investing because they are waiting for prices to keep falling.

„In the past, a construction site would be done in two-three years. Now it takes longer, which makes potential buyers postpone their investments for better times, while others are buying apartments in apartment houses that have already been finished," Mr. Ostafeiciuc concludes.

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After a nearly ten-fold increase in investments in residential real estate between 2003 and 2008 - when business numbers climbed from 337.1 million lei to 3.293 billion lei, they fell to 1.91 billion lei in 2009.

That was accompanied by a sudden decrease in apartments sold and opened for use. In 2008, 6,800 units were put into use. Only 4,100 were put into use in 2009. The surface fell too - from 680,000 square meters to 446,900 square meters.

According to the latest data provided by the National Bureau of Statistics, investments in fixed capital in the first trimester of 2010 fell 23.4 percent, after reaching 64.7 percent of the 2008 volume in 2009. The 31.3-percent decrease in investments in residential housing in the first three months of 2010 came after a 23.8 percent drop in January-March 2009.