TIRANA, October 21
With a global health crisis wreaking havoc on industries, economic sectors, and personal finances, the Bank of Albania took the temperature of the Albanian real-estate market to define if and to what extent the pandemic has sickened it. The findings give insights on the performance of construction companies and realtors, and the housing market while indirectly confirming the fact that the real estate market has never been healthy for the Albanian average and above-average wage earners.
Investing in real estate in the Albanian capital has always been a good idea considering that over seven years the housing index price increased by 43.4 percent.
Like every other sector, the real estate market was hit by the coronavirus. Unlike the other industries, it was one of the two sectors that saw growth during the second quarter of 2020, the period when Albania was under lockdown orders.
A recent publication by the Bank of Albania (BoA) gives more insights into the real-estate market during the first six months of 2020. The survey conducted by BoA consists of information provided by 165 construction companies and real-estate agents, who sold a total of 825 properties. According to their answers, over 35 percent of the residential and commercial properties sold during January-June was purchased by citizens who reside abroad. About one-third of the buyers were EU citizens.
Moreover, the survey confirms that over 60 percent of the commercial and residential properties buyers got a mortgage to finance the purchase. For over half of those property purchases the mortgage financed up to 80 percent of the value.
Other findings from the survey:
The average time to sell a property during Jan-Jun 2020 at the national level was 10.6 months. The same indicator for Tirana was 10.4 months or 1.2 months more compared to the previous six months. Meanwhile, the average time to sell a property in the coastal areas, Durres, Vlora, and Saranda was 10.7 months.
In terms of prices, the real estate index shows a 4.9 percent hike compared to the previous six months and a 40 percent growth compared to 2013.
The same indices for Tirana increased respectively by 6.5 and 43.5 percent. The average prices of properties in suburban Tirana increased by 50 percent. Only the properties sold in the city center and suburbs marked a slight decline in prices.
Further on, property prices on the coast declined by 15 percent.
On the other hand, real-estate agents reported increasing rental demand both for residential and commercial properties. Consequently, they confirmed an increase in rental prices especially in the Tirana downtown area.