Foreign and diaspora buyers contributing to increase in real estate prices, experts note

TIRANA, Sept. 28 – About one in three real estate properties sold in Albania in the first half of 2021 were purchased by people who don’t live in the country, according to a central bank survey. 

The Bank of Albania’s periodic survey on the real estate market and the house price index shows that non-resident buyers continue to have a significant share in the real estate market transactions in the country. 

Home prices, particularly in Tirana have seen steep increases, on average by 50 percent, since 2013. 

However, the trend of purchases by non-residents is not new, as it has regularly been above 30 percent in recent years. Almost 40 percent of the non-resident buyers live in the European Union, according to the central bank data.

But while members of the Albanian diaspora abroad have always invested at home, according to Monitor, the Albanian business magazine, what is new is the increase in foreign nationals who choose to buy property in Albania, especially in coastal areas. 

This new demand could partially explain the rise in real estate prices in recent years.

As of 2021 H1, the Fischer Index of house prices nationwide, calculated by the Bank of Albania, has increased by almost 50 percent since 2013. In the first six months of this year, the annual price increase was 6.7 percent. About two third of the interviewed subjects expect housing prices to remain unchanged during the second half of 2021, while the share of those who think they will increase is about 28 percent of the total number of responses, according to Monitor magazine. 

Real estate agents say that purchases by foreign nationals or Albanians living abroad have an important role in this market. 

This includes Kosovo citizens who are interested not just in vacation properties in the seaside but in Albania’s cities too, no doubt related to the full opening of Albania’s labor market to them. 

According to the Bank of Albania, the number of properties sold by the surveyed entities increased in the first half of this year by 12 percent compared to the second half of last year, but was lower by 14 percent compared to the same period of a year ago. In total, the surveyed firms and agents reported 709 transactions during the first half of 2021. According to agents, half of the residential and commercial properties sold by them were purchased with bank loans, with the other half bought in full with liquidity.