TIRANA, Feb. 11 – Both house and rental prices dropped in the final quarter after an increase in the year’s third quarter, hinting sluggish demand for new apartments, according to a central bank survey.
House prices dropped by 4.8 percent in the final quarter of 2014 after increasing by 7.7 percent in the previous two quarters. Meanwhile, rental prices dropped by a considerable 14.8 percent after a 7.7 percent increase in the year’s third quarter.
House and rental prices have suffered a considerable decline during the past four years after the collapse of the remittances-fuelled construction boom in the pre-crisis years.
House prices in early 2015 dropped by 20.6 percent compared to 2010 while rental prices were down by 16.2 percent, says the central bank.
Surveys show citizens are becoming more reluctant to buy new apartments because of falling revenues and a sharp decrease in migrant remittances. Poor demand for new loans and tight lending standards as bad loans stand at 20 percent also remains a barrier.
Thousands of apartments remain unsold, especially in the cities of Durres and Vlora which have seen a boom in construction, says the Association of Construction.
