Why Invest in Moldova’s Real Estate: If you’re looking for hidden gems in the European real estate investment landscape – look no further. Reinvest24 offers a unique crowdfunding investment opportunity – real estate development projects in Moldova.
Currently, there are several projects available for investment and know the reason Why Invest in Moldova’s Real Estate – a shopping center and two phases of residential development loans. Despite its proximity to the European Union, Moldova is an overseas real estate investment destination. However, we see it as a country with huge growth potential and a vibrant real estate development scene.
We have listed 7 reasons that Why Invest in Moldova’s Real Estate and make Moldovan real estate an attractive addition to your portfolio, but there are many more…
Moldova gained independence from the Soviet Union in 1991 and has been pro-Russian in its foreign policy decisions since then. However, Russia has lost its strategic appeal to the Republic of Moldova after imposing economic sanctions. As a result, the Moldovan government decided to “look west” and adopt market-friendly reforms. Evidence that in the 2019 nationwide elections the Communist Party was barred from entering parliament for the first time since 1991.
Relations with the European Union
In addition, Moldova has signed a cooperation agreement with the European Union in 2014. The agreement entered into force in 2016 and established a “Deeper and Comprehensive Free Trade Area” (DCFTA) that provides zero-levy exports for agricultural products. This is important for Moldova, where over 30% of the total population is employed in agriculture.
Cooperation with the European Union is facilitating the strengthening of the rule of law and democratic standards in the Republic of Moldova. The European Union is assisting Moldova in the fight against corruption, one of the main political problems, by funding special anti-corruption programs. In addition, the European Union supports job creation and the development of the regions in the Republic of Moldova.
Impressive GDP growth
The GDP growth of the Moldovan economy has been remarkable, with one of the highest rates in Europe – over 4% in 2016–2018. GDP grew by 3.6% in 2019. Like the rest of the world, the global pandemic has affected the expected GDP figures. Pre-pandemic 2020 Moldovan GDP was expected to grow by 3.8%, however, due to the crisis, baseline GDP estimates have been lowered. Let’s see what the figures ultimately show, but hopefully, the world economy will be able to bounce back.
Low prices on real estate
The average price per sqm in Chisinau is much lower than in any other capital city on the European continent. The construction cost is higher than this in most countries. The price per square meter during its peak in July 2019 was only 533 euros.
Due to the global shock caused by the pandemic, the price per square meter has fallen to 506 euros. Many local real estate experts believe that prices will no longer drop dramatically, as it is a logical course of events that calls for temporary closure. economy, leading to even less activity in the real estate sector. The Housing Affordability Index tells us that buying a home in Chisinau is more affordable than in any other European country. This will also have a positive impact on property prices.
Overall, Moldova was losing a working-age population due to its immigration abroad. On the other hand, the capital Chisinau has always benefited from internal migration which has supported the demand for new homes. In 2019, 22,187 homes were sold in Chisinau (an increase of 40% from the previous year). The construction of residential houses has increased by 63% in 2019 as compared to 2018. In addition, mortgages approved in 2019 rose 25% to 10,385 from 8,255 a year earlier. Commercial real estate is also in demand. Primarily operated by foreign companies, which accounted for about 35% of available commercial office space in 2017-2018.
The government program “Prima Casa”, which translates as “First House”, is helping employed citizens who are buying their first home, until they are 18 years old. Fund the required initial deposit. The government has already contributed 112 million euros to help 4,296 families under this program. The good news for the real estate sector is that the government has increased the upper age limit for eligible customers from 45 to 50 years on 21 May 2020.
Why invest in Moldova now?
Moldova is strategically placed to connect large geopolitical blocs such as the CIS (Commonwealth Independent States), Europe, and the Middle East. With the help of the European Union, the Republic of Moldova is adopting policies aimed at modernizing the economy as well as fighting corruption and strengthening the rule of law.
Thanks to the measures adopted, the economy of the republic was growing at a rapid pace, which has been disrupted by the global pandemic. On the other hand, the real estate sector will see fewer negative impacts, so investing in modern buildings in the capital is a great addition to the portfolio. Moldova real estate investment projects listed on Reinvest24 will not only bring you diversification but will also increase your overall returns as we are offering 15% returns.
Investing is risky, especially in uncharted territory. However, as we have shown you in 7 points, real estate in Moldova is particularly attractive right now because we think it is undervalued. Of course, the “spicy” changing economic and political picture with the global crisis is making it very daring to buy an entire property in Moldova. However, contributing a small amount and buying shares with the help of crowdlending platforms is an opportunity that should not be missed.
Key facts about Moldovan real estate
- Even though Moldova is not yet part of the European Union, there could be great potential in terms of real estate development, especially with the new prime minister in place.
- Given that the country’s economy is 10-15 years behind the Baltic’s, property prices will rise in the coming years. The current price of real estate in Moldovan is about 600-800 euros per square meter. which is much cheaper than the level of any country around it, especially if it is an EU country.
- Currently, profitability is one of the highest in the real estate construction sector.
Know complete information about Why Invest in Moldova’s Real Estate at https://www.evisa.gov.md/