House purchasing is one of the most overwhelming decisions for anyone in Albania. It is an important long-term investment that provides better living conditions and possible profits in the future. The housing market is subject to various housing and social state policies that affect people’s decisions about buying a house. Moreover, the market is also closely related to the banking sector and its lending activity. According to the Bank of Albania (BoA) most of the investments in immovable properties are made through loans, thus changes to the interest rate can have an impact on the entire construction sector. Changes to the price of immovable properties have a key role in the decisions taken by central banks all over the world and this was confirmed by the global crisis of 2007-2008. However, the way how these two sectors depend on each-other is difficult to understand if you’re don’t have a financial background.
The Albanian economy went through different stages during the recent decades as it passed from a centralized economy to a market economy. The construction sectors and the housing market gave a major contribution to economic growth during this period.
The housing market, as well as the price of immovable properties, reflected a significant growth during the 2000-2007 period, and it went through a period of stagnation after 2008.
The factors that affected the construction sector:
- Lack of housing premises
- Poor quality of existing buildings
- Changes to family formation and structure
- Demographic factors
- Higher demand for housing from migrants
- The consolidation of the banking system
- Currency rates
Real estate trends in Tirana
Real estate agents confirm a recent trend of people’s interest in buying properties in the suburbs of Tirana because of more affordable prices. The cost of an apartment in the suburbs of the capital city varies from Euro 35,000 to Euro 80,000. The Albanian government adopted the new referential prices on housing at the beginning of 2017 for the 32 cadastral areas of Tirana.
Increased interest for properties in coastal areas
If you’re interested in a seaside apartment, you can buy one in Saranda for Euro 750 per square meter. Saranda is an example of the boom in the construction sector. Albanian second home buyers at first started to buy properties in the Golem area in Durres. Meanwhile, the entire coast is drawing more buyers, both Albanian and foreign.
Foreigners Buying more Homes in the Albanian Coastline
With 476 km of coastline from the Adriatic to the Ionian seas and more than 310 days of sunshine a year, Albania is luring foreign property buyers. Currently, they are considered to be the main participants that keep the housing market moving. Most of the buyers are from countries of the Balkan and South-Eastern Europe regions and especially from landlocked countries. In the meantime, Albanians from the diaspora are also investing in the housing market in the coastal areas. The property location is one of the key factors that define its price. The Buyers with a limited budget, mostly look for properties in Durresi or Shengjini, while others search for more expensive options in Southern Albania.
Italian, French and German pensioners find their Florida in Albania
An increased number of foreign pensioners have come lately to live in cities like Durres, Saranda or Vlore during the recent years. They say that the living cost in Albania is much lower compared to their homeland. An example is Roberto Mazzuca, a successful young Italian realtor who provides real estate solutions to Italian citizens that are interested in renting a property in Albania.
The Albanian coastline is the cheaper alternative to property investors and people that are looking for a seaside property. However, luxury properties are also available in Lalzit Bay or are under construction in Palasa, Dhermi. The good news about foreigners that buy an apartment or villa in Albania is that there is no restriction in buying a place.
What is the Best Place to Invest in Real Estate in Albania?
If you are looking for a country where to maximize investments in immovable property, Albania is a great option. It has a good geographic location, a long coastline in the Adriatic and the Ionian sea, and it’s a short flight distance from the major European capitals. All these and much more make it a good option for investing in immovable property in suburban zones, old towns, historic centers, and rural areas.
Today, residential property in Albania is cheaper in comparison to the upcoming years. In short, the best time to invest in immovable property in Albania an apartment, villa or land is now. Before buying a property in Albania as a foreigner, there are some things you need to know about the real estate market and the land of Eagles in general.
The Albanian real estate market, with the exception of a few coastal cities and villages mostly in the southern Riviera, is geared towards Albanian citizens and Albanians that live in other countries. Meanwhile, capital city Tirana is still not seeing the foreign appetite for residential property. Even the foreign citizens that look for commercial property tend to rent instead of buying.
The good thing about the real estate market in places like Saranda, Vlora, Gjirokastra, Qeparo, Borsh, Himara, Vuno, and other coastal villages is that they are not as expensive as the immovable property on the other coast of the Ionian or Adriatic seas. Compared to Italy where only wealthy foreign buyers can afford a property in a highly sought area like Cinque Terre or Como Lake Albania offers excellent properties at a fraction of the price in other countries in the Mediterranean region.
The categories of people with the highest interest in immovable property in major cities like Tirana, Durres, Elbasan, Shkodra, Gjirokastra, and Korca are students and foreign citizens working in Albania. The majority of Albanian citizens are homeowners. Recently, realtors noticed an increasing trend of second-home buyers. They invest in immovable property and give it for rent. There are different ways of monetizing a real estate investment like flipping for profit, renting, or Airbnb.
What may scare away potential foreign buyers?
While in other countries the taxation system may be the scarecrow that scares away buyers, in Albania the problem is part of the immovable property sector. The law on foreign investments grants special protection to investors regarding immovable property disputes. Albania is still difficult to find who the rightful owner of a specific property is due to various reforms and even unlawful activities. On the other hand, the legal system is still weak and not the most efficient when it comes to protecting the right of a citizen, Albanian or foreign.
However, the Justice Reform, also known as the vetting is expected to clear the system from corruptive elements and reform the entire sector, but this is another story.
If you plan to invest in real estate in Albania aim either for university cities or tourist destinations. In both cases, you can put your property on Air BNB for the time of the year that you don’t use it. These areas and economic hubs attract long-term tenants.
Types of properties you can find in Albania
Charming and historic buildings are possible to find from capital Tirana to every corner of the country. Old houses in traditional architecture can be found at affordable prices when a lot of reconstruction work is required. On the other hand, they can be too expensive especially in the UNESCO World Heritage Sites of Mangalem Quarter in Berat and in the historic area of Gjirokastra. Other cities to consider are Kruja, Shkodra, Durres, Korca, the northern areas of Kelmend, Theth, and Valbona, Permet, Konispol, coastal villages in the southern Riviera. Old houses are less efficient to new houses and this is an element that can lower their price.
Countryside properties are great options and they can also include plantations of citrus fruits, olive groves, and even vineyards. The Albanian authorities have recently launched 100 Villages initiative. There are the best options to take into consideration if you’re looking for the countryside.
Waterfront properties. If it’s waterfront it is found in a popular tourist area. One of the areas with the cheapest waterfront properties in the city of Durres. It is the Albanian version of Florida as many Italian elderly people prefer Durres when retired. They like warm weather, cheap prices and, friendly people. Saranda in the south is the city that attracts the highest number of foreign buyers. This trend is affected by the high number of visitors and tourists and the competitive prices compared to the other countries of the region.
According to Monitor Magazine, the Durresi coastline is divided into three areas. Lalzi’t Bay is the most expensive area where the price per square meter varies between Euro 900 and 1,100.
The second area is located from Plepa to Golem, where there’s a rising supply in properties. The cheapest houses can be found in the buildings behind the railway, where the average piece is Euro 300 per square meter. In the meantime, the price for the homes located near the beach varies between Euro 700 to Euro 750.
The third area is Golem – Qerreti beach, where the apartment prices vary between Euro 800 and Euro 850.
Housing in the southern coastline, and especially in the Riviera, is far more expensive compared to the other parts of the country. Radhima and Orikum offer cheaper housing opportunities compared to the coastal villages farther south. Based on the offers listed in Radhima, the average apartment cost is Euro 700 per square meter. Meanwhile, the prices in Orikum vary between Euro 450 and Euro 500 depending on the distance to the beach.
The prices begin to rise in the Riviera, where the average price for a square meter in Dhermi is Euro 1,200 and while the costs are rising, supply is limited.
Real Estate in Saranda
According to the major real estate agencies and especially those focused on the coastal areas, the city of Saranda is the most attractive market for foreign buyers. They visit the city during the summer season, and they come back again in autumn to buy a house. Saranda remains the first choice of buyers from northern Europe and the Scandinavian countries, due to the proximity to Corfu Island airport. The average price per square meter in Saranda is Euro 900.
Saranda is closer to Greece. It shares two land cross-border points in Kakavija and QafeBota, it is connected to Corfu Island by regular ferry boats. The highest number of visitors arrives from Corfu via its airport. Yacht’s owners can anchor their boats at the city’s port. Besides the numerous beaches, Saranda attracts with its cultural and historic heritage. Butrint, a UNESCO World Heritage Site and the most visited tourist attraction in Albania are 18 km away from Saranda, while there are numerous locations to explore in the southern region. The price of small apartments in Saranda and other coastal villages in the south varies between Euro 30,000-40,000.
Old Vilas in Coastal Villages, Southern Albania
Old villas for sale can be found almost in every village on the Ionian Coast. They are located in small villages on mountain slopes. Qeparo is a highly attractive market for international home buyers. However, Konispol in the southernmost part of Albania will soon become a destination for homebuyers. Old buildings, with garden and fruit orchards included, are sold at Euro 140,000. They need restoration but are worth the investment. Konispol is a few minutes away from the Greek border and three hours away from Corfu International Airport.
The list of the best coastal areas where to buy a property includes Orikum, Radhima, Spille, Qerret, Golem, Lalzit Bay, Rodoni Kape, Shengjin, and Velipoja. Prices start with Euro 300 in Durres to Euro 1,000 in Saranda.
