Housing prices have risen again in the first quarter of 2009. This is the finding of a recent study by the Bank of Albania (BoA), quoted by Korrieri (5.08.2009). This in spite of the affects of the global downturn in Albania and in spite of the lack of sales in the housing sector, highlights the newspaper.
After a twelve-month period of falling prices, the first trimester of 2009 showed a tendency of price increases in the housing sector, writes Korrieri. This tendency was confirmed in the second quarter of 2009, giving at it a year to year increase of 15.6 % (8% after inflation). The prices have partially risen because of the devaluation of the national currency, the Albanian Lek (ALL). Over the last few quarters, the Albanian Lek has experienced a “landslide” fall in its value with Euros and US Dollars.
Higher costs
According to the analyses of the BoA, prices devaluation of the Albanian Lek (ALL) resulted in a 7 % increase. The rest of the price rise is due to the increasing cost of construction (building materials and labor). The rise in the costs of the building materials are thought to be the main culprit in making housing more expensive. The part that they play in the price rise amounts to something more than 8 %.
Previsions
The rise in building material costs are expected to continue to affect sale prices in the housing sector. On their side, builders say the housing prices will continue to be consistent throughout 2009. But banks are less ready/willing to give credits and a credit crunch may be under way in Albania as in the majority of countries in which the local banking systems and banking behaviors have been affected by the global financial crisis. This may induce analysts to expect a refraining of price increases. The short to mid-term evaluation or devaluation of the national currency, the Albanian Lek, is expected to still continue to exert a pressure on sale price changes and tendencies.
