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Market Guest Post – Albania
February 17, 2010Article by Ray Withers
Many thanks to www.albania-estate.com for their guest contribution to our blog.
In a new feature I will looking for local agents all over the world who can give me the inside scoop on what’s happening on the ground in and around the world’s cities and towns. Albania Estate are Albania specialists who have kindly provided us with an insight into what we should look for when investing into the Albanian real estate market.
What are the current prices are in Tirana?
Tirana has prices of apartments that vary from 450-550 Euro/1m2 in the outskirts of the city (Kashar, Ystberisht area), 500- 650 Euro/1 m2 in Dajti area, 700- 900 Euro/1m2 in the artificial lake area and 900-1200 in the inner parts of the capital city. While “block” area has prices that start from 1200 Euro/1m2 and go as high as 2500 Euro per 1m2.
What are the current prices are in Saranda, Vlora etc?
Front line in Vlora varies from 600-800 Euro/1m2 (old beach area), 900-1000 Euro/1m2 (around cold water area), 1200 Euro/1m2 (further out from the cold water area). Saranda- front line prices vary from 700 Euro-900 Euro/1 m2 (located near the city), 600-750 Euro/1m2 second line (in residences with a max distance of 200 m in straight line from sea and with full sea view).
Is it local or foreign people buying?
There is still a big majority of Albanian emigrants that buy in the coastal cities and approx 20% are foreigners. While in Tirana the real estate market is still doing OK, but foreigner’s presence in the real-estate transactions (apartments) is very low.
What has been capital growth over the last 2 years etc?
Growth in the front line apartments in Vlora and Saranda has been 10%-15%. In other locations prices have stagnated. But in Tirana there has been a small increase of approx 5% during 2009.
What is predicted?
Real estate Prices are set to grow during 2010. Tirana market is showing signs of an increasing number of sales, and in general developers are having higher expectations for 2010.
How secure are developers?
Fact is that in the 1st part of 2009 developers have gone through very tough time. Many small companies were in the edge of collapse. Many projects were delayed due to poor sales and lack of finance.
Are they flexible on price?
Developers are now more flexible than before the crisis.
Is there any finance?
Finance has stopped for foreigners. There is finance available for locals, but interest rates have increased up to 9-9.5% for Euro.
Has the real estate market been hit by recession?
Slow down in new projects during 2009 in the southern cities. In Tirana slow down of new projects has happened partially due to delays with issuing of new permits.
How secure are the title deeds etc?
Title deeds of the lands are OK. Now the government is working on a project to digitalise all the registration process in the registration offices of immovable properties. On the other side there is sometimes a government muddle with processing of the finished projects and providing them with the title deeds. This is the weak point in the registration offices and is main factor which fuels corruption.
What are the best payment terms to buy?
In general developers are flexible with payments terms. This has happened even because of the crisis. Best terms are paying in accordance with the construction stages, i.e. 30% down-payment, 30% with completion of shell, 30% on delivery of apartment (and buyer can use the apartment), 10% with registration of the apartment.
What is the rental market like?
Best rental market is in Tirana, and in best properties rental income can go higher than 10% pa. While in the coastal cities good properties can generate a max of 7% but there is s lot of potential as the holiday season will increase more than just 2-3 month nowadays.
What is the property management market like for foreigners?
Property management market is at the very beginning stages. While in Tirana big construction companies who have built big projects or commercial centres are already doing it. Also companies that sell to foreigners in the south have created units that look after apartments of their clients.
Are illegal properties still being built?
No, illegal buildings are not being built any longer. Government authorities are being more and more efficient to stop and penalise illegal buildings. On the other side people are being more cautious and not taking any risks.
Are any houses being built yet?
There are many projects being built in Tirana with a considerable number of houses.
Any big developments being built with Marinas , Golf etc ? There are some very ambitious projects with marina and golf courses but still lacking behind with funds needed, while some very good ones have been approved and underway in the seaside only 40 min from capital city and Tirana International Airport.
I hope that has given you a good insight into the Albanian market and it should prove very helpful to any of you looking to invest into that market.
If you are a agent or have any knowledge of the local real estate market in your area, please don’t hesitate to get in contact with me at firstname.lastname@example.org
Many thanks for reading,
Written by: Christopher Chadd