Should You Invest?
Whether Albania is a good investment really comes down to your
attitude to risk. It is a new and untested market in a country that
has only seen a short period of social and political stability and
democracy. Unemployment is still high at around 15% and around 10%
of the population still live on less than $2 per day. The present
government was elected somewhat controversially and a black market
economy thrives, as does organised crime. The recent introduction
of mortgages to Albania is partially responsible for sparking the
current construction boom but, so far, less private foreign
investment than predicted is entering the country. It may not,
therefore, suit those who have a more cautious attitude towards
investment.
- The domestic side of the economy and exports are expanding
within Albania.
- The country has had low inflation rates for some years and
continues to do so.
- Albania has established its trading industry and about 90% of
foreign trade is within the EU.
- Labour costs in total are considerable lower in Albania other
than similar countries. The country's work force is very skilled
and adaptable.
- Nationals of Albania have very good language skills and most
Albanians can speak at least one other language.
- Setting up a business in Albania is currently more time
consuming than is other European countries as there are more
procedures, The government is simplifying Administrative and
business regulation.
Rental Yields
With an increased tourist industry, Albania has a lot of room
for development for both property and businesses. Albania is a very
new tourist market and the country is only just building a
reputation as being a good tourist destination. With more visitors
travelling to the country the buy-to-let market is looking like a
promising market for investor. The average rental yields in Albania
are 6% and with the aim to join the NOTO in 2008 and the European
Union in 2014 rental yields are predicted to rise
significantly.
Price History
Historically, property was owned collectively due to the
Communist government directive and much of what was available would
not suit a contemporary investor. There is, therefore, no reliable
data as yet on price fluctuations, although there are claims by
property agents that prices have risen by as much as 30% per annum
in the past three to four years. Currently property in new and
off-plan developments is selling from around €24,000 and average
prices of land are around €50 to €150 per square metre, depending
on location and whether planning permission has been granted.
Prices in Tirana are forecast by some professionals to continue to
increase by as much as 30% in 2007.
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