TIRANA, September 2
The flux of constructions is the highest in the capital city, Tirana, at least in the last decade, even though the population is in decrease and the demand for purchasing an apartment has matured. According to the latest publication by INSTAT, on Friday, August 30th, titled ‘The Construction Permits, Q2 2019’, the surface given for construction permits in the first 6 months of 2019, was the highest since 2011, when the Institute of Statistics reports the data divided according to counties.
In the first 6 months of 2019, the surface given for construction permits was 753.000m2, which corresponds with an approximate value of constructions of €224 million. This surface is more than double of the previous records, reached in the first half of 2014 and 2018. Compressed is the area of Tirana especially, where the apartments will be sold starting from €2000-2500 per m2, and for offices and stores over €2500-5000 per m2.
According to the Canadian agency, Colliers International with a branch in Albania, that operates in the real estate service industry, the total surface is predicted to be constructed during the next 5 years (supposing a normal performance of construction), in the central areas of Tirana, projects of a certain scale, are estimated to be around 538.000m2. The constructions are expected to be with higher rhythms for the period 2019-2021. These projects are developing during a time when the expansion of the population in the capital city was halved in 2019.
According to data by INSTAT, in 2019, in Tirana County, there were approximately 895.000 inhabitants.
Even though, Tirana and Durres are the only counties that increase, in the capital city in 2019 there were added 11.000 more inhabitants, from 21.000 last year. Even this coming flux, can’t buy expensive apartments. Market operators say that the new flow in the city supply at the same time, the rent and sale market, but they require economic prices, something that doesn’t correspond with the boom of luxurious constructions and high prices.
Stela Dhami, the managing director for Colliers International in Albania says that it is being constructed frighteningly, without any market logic. She adds that the projects are being taken without having a clear concept for the logical development of the market. Investments are oriented from the location, without seeing the developing potentials, because it is perceived that the risk is zero when it is a prime location.
The biggest concern of the main operators in the market is that the constructions in the Tirana area, are being done without empiric studies, and without being based on analysis as to how it will continue the demand performance in Tirana. Market operators, that don’t want to be identified predict that will be a blockage of the real estate market in the next two or three years, urged by the decrease of demand, but even from the high prices in rapport with the purchasing power in the country.
Read also: Real Estate in Albania
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