UNUnited Nations Economic Commission for Europe

Press Release


Geneva, 15 May 2002


UNECE assesses the housing sector in the Republic of Moldova

Why bother with homeownership? This is a question many people in the Republic of Moldova are asking themselves. In a country where private ownership is still a relatively new concept and homeownership is equated with extra costs and worries, many former tenants may wish they had remained just that - tenants.

This is one of the findings just published by the United Nations Economic Commission for Europe (UNECE) in its Country Profiles on the Housing Sector - Republic of Moldova, the sixth in a series of country reports which examine the trends in the housing sector in countries in transition and put forward recommendations.

Since independence, most housing has been privatized in the Republic of Moldova, but its upkeep has become minimal and haphazard. The benefits of an open housing market are at present available only to the exceptionally wealthy, who are few and far between in a country where the average monthly wage is $33. In these circumstances the poor prefer to stay where they are, as tenants in government-owned housing, not paying for services, energy or maintenance. In the current economic climate there is little that the government can do. People need to be housed; they cannot be thrown out.

The amount of housing is not the main problem. The prevailing energy crisis and the results of the rapid privatization of the housing stock with no subsequent solutions for maintenance of the existing buildings are more burning issues. The condition of Moldova's housing stock is the single most crucial housing problem facing the Republic. Another is the remarkable disparity in housing standards between the urban and rural areas, where over half of Moldovans live in compactly built villages. In rural areas, only 1% of homes have running water. Many homes are affected by the risk of earthquakes or landslides.

Housing is a highly integrated business. For example, the problems of housing maintenance can be resolved only when certain financial and legal constraints are removed. The housing market will flourish only with a subtle mix of policy, institutional, legal and financial measures. With 88% of housing owned by private individuals, Moldova is committed to using market mechanisms to provide decent homes for its people. Financial, institutional and legal reforms over the past 10 years have been geared to making this possible. One particular success has been the establishment of a national cadastre for the registration of all property ownership and transactions.

The main problem is purchasing power. At present only 1-2% of households can afford a new home. Purchases are nearly always for cash. The housing loans that do exist are short-term, usually for up to three years. Interest rates are excessive, typically 30% a year. The key to resolving this problem is the development of practical financial measures underpinned by policy, legislation and regulation to gradually improve confidence in the housing market. The report also recommends that the housing sector should be made more attractive to institutional investors, such as private insurance companies, pensions funds, investment companies and credit unions.

In the short and medium term, housing conditions in Moldova may deteriorate particularly for the poorest people. Homelessness may become a problem as the worst apartment blocks become uninhabitable; as rent and service charges rise to economic or market levels; and as courts begin to repossess homes and evict residents for serious non-payment. The State should, therefore, consider creating a social housing safety net for households unable to solve their own housing problems through the normal housing market. A social housing safety net should be available to all, and be means-tested.


Housing amenities (Percentage of all dwellings)

Source: Department of Statistical and Sociological Analysis.


Housing quantity (Number of dwellings per 1000 persons)

Source: Statistical Yearbook of the Republic of Moldova.


Number of completed dwellings


A Country Profile is a strategic analysis of a country's entire housing sector. The study covers institutional, legal and financial frameworks for the housing sector and analyses the existing housing stock as well as the socio-economic transition in order to make recommendations for national policy formulation. As a voluntary exercise, the Country Profile study is undertaken at the request of the country itself. An international team of experts from all over Europe, including countries in transition, cooperates with a national team during and after field missions to the host country. The report with its recommendations is published as an official United Nations document and distributed to the UNECE Committee on Human Settlements and to all 55 UNECE member countries. This will serve all those in national housing and allow for international comparison. The report is also available on the Internet http://www.unece.org/env/hs/welcome.html


For further information, please contact:

Christina von SCHWEINICHEN, Deputy Director
UNECE Environment and Human Settlements Division
Palais des Nations, office 340
CH - 1211 Geneva 10, Switzerland
Phone: +41(0)22 917 23 88
Fax: +41(0)22 917 01 07
E-mail: [email protected]


Veikko VASKO
UNECE Environment and Human Settlements Division
Palais des Nations, office 328
CH - 1211 Geneva 10, Switzerland
Phone: +41(0)22 917 19 27
Fax: +41(0)22 917 01 07
E-mail: [email protected]

Ref: ECE/ENV/02/04