House Construction Costs Down in Q4 While Prices Up

TIRANA, March 4

Rising construction prices mean rising house prices. Although official data from the Institute of Statistics confirm a decline in the house construction index, prices in the housing market continue rising. According to INSTAT, the house construction index reached a rate of 104.1 during the fourth quarter (Q4) of 2019, down to 0/1 to 2018. In the last three months of 2019, the material expenditures and other expenditures groups decreased respectively by 0.9 percent. Meanwhile, machinery expenditures and salary expenditures increased respectively by 0.8 percent and 0.5 percent.

The decline in the house construction index was not reflected in the housing market. According to monitor magazine, the housing prices growth, within the ring road area, varied between 10 and 30 percent in 2019. Hence the change in price per square meter varies from Euro 100 to Euro 600.
According to stakeholders, the real estate price hike could be related to new taxes and money laundering. Worldwide, the abuse of the real estate sector has long been described as one of the oldest known ways to launder ill-gotten gains.

Source: INSTAT, monitor