Housing prices rise expected not only in the capital
Albanian Association of Builders has presented a 2024 real estate market forecast. According to the report, housing prices are expected to rise in the capital. Experts believe the cost of apartments and houses could increase by 20%. The main reason for the housing prices rise is the increase in tax rates, which puts pressure on the construction sector.
The increase in property values will also affect the country’s coastal regions. At the end of 2023, the municipality of Vlora sent a proposal to the government to revise the tax rate. The proposal is to increase the rate levied on development projects from 4% to 6%. In Tirana, on the other hand, the tax is 8%, the highest in the country.
Another factor contributing to the increase in housing prices is the change in real estate tax valuation. So far, its impact has been on the capital market, but it could spread throughout the country in the future. The increase in guide prices could lead to a 40% rise in construction costs.
Situation in the construction sector
According to the forecast, the number of building permits should increase in the current period. The dynamism will be most visible in the coastal regions. As for Tirana, the developers’ activity will remain at the 2023 level.
INSTAT reports that the Municipality of Tirana issued permits for constructing buildings and structures with a total area of around 1.81 million square metres in 2022. This impressive figure reflects an increase of 10% compared to 2021. It is the highest since 2005.
Overview of housing prices rise on resort property
Saranda was The leader in house price growth among Albania’s resorts. Despite the increase in the number of new buildings, there was an active increase in property prices. In the city, the cost of properties under construction increased:
– the price of a square metre of such housing is between 1.5 and 2.5 thousand euros;
– in 2022, similar variants were sold at 1.2-1.7 thousand euros per square metre;
– such cost is typical for housing 500-1000 metres from the sea.
Over the year, the increase in property prices ranged from 25% to 47%.
The maximum cost of housing in Saranda is between 3 and 3.5 thousand euros per square metre. Apartments with large terraces close to the sea will most likely command such prices.
Properties with sea views are still in demand:
– seafront apartments are selling for 2.7-2.8 thousand euros per square metre;
– luxury villas in the Palas beach area cost around 1.6 million euros.
Experts are noticing changes in property price formation this year. New apartments cost the same whether on the first line or far from the sea.