TIRANA, Feb. 4 – After consecutive drops in the first three quarters of 2014, house prices remained unchanged in the final quarter of the year while rental prices were up by 4.9 percent, according to a survey published by the country’s central bank.
“Excluding the final quarter of 2013, house prices have been on a downward trend in the past couple of years, reflecting the sluggish demand and presence of unsold inventory,” says the central bank.
The increase in rental prices came after a 17 percent decline in the third quarter of 2014, the sharpest quarterly decrease since the onset of the global financial crisis in 2009.
Surveys show citizens are becoming more reluctant to buy new apartments because of falling revenues and especially a sharp decrease in migrant remittances. Tighter lending standards as bad loans have reached a record 25 percent have also influenced.
Apartments prices in Tirana vary from 700 to 2,500 euros/m2 in downtown Tirana compared to 400-650 euros/m2 in uptown areas of new ring road and Fresku. Thousands of apartments also remain unsold, especially in the cities of Durres and Vlora which have seen a boom in construction, says the Association of Construction.
The low number of construction permits issued by local government units is another reason for the crisis in the long-ailing construction sector which has been in crisis since the onset of the global crisis in 2008.
