TIRANA, Jan. 5 – Government says it has lifted a one-year ban on construction permits issued by local government units after the National Territory Adjustment Council identified all urban areas in the country and approved the construction maps.
Speaking at a press conference this week, Urban Development Minister Eglantina Gjermeni said the lift of the ban would enable the resumption of construction permits for individual houses, public buildings, infrastructure and emergency interventions, as well as buildings serving the economic development, tourism, agriculture and farming.
However, the new decision has restricted the power of local government units by requiring prior approval by the newly established National Agency for Territory Planning.
“I would like to assure that the territory control and administration process includes not only the elimination and correction of illegal interventions, but in parallel and step by step, the creation of approved and controlled spaces for construction for public, business and household purposes,” said Gjermeni.
Business associations had been continuously calling on government to give an end to the construction ban, warning that the tough measure was taking the industry into collapse and endangering the country’s economic recovery.
“The freeze of construction permits has brought a chain reaction in this sector including the construction material industry. Institutional inability to control legal violations with construction permits cannot be solved out with the complete ban of a very important economic activity for the country,” the Konfindustria association had warned.
In late 2013, Prime Minister Edi Rama announced a freeze on construction permits issued by local government units, i.e municipalities and communes, until the local elections of 2015, to prevent what he called an ‘urban massacre’ in the country.
Construction permits registered a significant recovery in the third quarter of 2014 ahead of the temporary ban later in the final quarter.
INSTAT data shows some 122 construction permits nationwide were issued in the third quarter of 2014, compared to a total of 97 in the first half of the year and 88 in the third quarter of 2013.
Having been one of the key drivers of Albania’s growth in the pre-crisis decade, the construction sector has been one of the hardest hit in the past five global crisis years.
Declining remittances, tighter lending standards on home loans and lower number of construction permits have considerably affected this sector which used to be one of the key drivers of Albania’s average growth of 6 percent annually in the pre-crisis decade.
INSTAT data shows the construction sector accounted for 12.2 percent of the GDP at the end of 2013 down from a record 18 percent in 2008 just before the onset of the global financial crisis.
The standstill in this sector is also unveiled by a recent survey conducted by the central bank, revealing that a record high of two-thirds of real estate agents reported they had failed to sell any property in 2014.
Reports show citizens are becoming more reluctant to buy new apartments because of falling revenues and especially a sharp decrease in migrant remittances. This is confirmed even by data of the Albanian Association of Constructors which says some 4,000 apartments remain unsold because of falling purchasing power.
House and rental prices have also been on a downward trend during the past year.
