Only 22 construction permits issued in year’s first quarter

TIRANA, July 16 – Apart from falling demand and tight lending standards, the low number of new construction permits issued by local government units is also affecting the crisis-hit construction sector. INSTAT data show only 22 construction permits were issued during the first quarter of this year in the whole of Albania, of which only one in Tirana. Data show the number of new construction permits dropped by 70 percent compared to the final quarter of 2012 but grew by 15.7 percent compared to the first quarter of 2012.
Most construction permits during the first quarter of 2013 were issued in the southern coastal city of Vlora, some 11, and ten others in the northern city of Shkodra. Only one permit was issued in Tirana where a newly adopted regulatory plan is expected to unblock them.
Dealing with construction permits ranks Albania with the worst global performance, 185th along with Eritrea. Albania and Eritrea are both “no practice” economies with barriers preventing private builders from legally obtaining a building permit, according to Doing Business 2013. Last year’s Doing Business 2012 report ranked Albania 82nd noting the ongoing difficulty in dealing with construction permits. “In Albania dealing with construction permits became more difficult because the main authority in charge of issuing building permits has not met since April 2009.”
The construction sector, once the key driver of the Albanian economy, but now accounting for only 11 percent of the GDP, declined by 4.8 percent year-on-year, but was up by 3.8 percent compared to the final quarter of 2012. In crisis since 2008, due to falling purchasing power especially from crisis-hit migrants, the construction sector has failed to recover during the past four years also due to lending standards becoming tighter as bad loans stand at a record 24 percent. Unpaid government bills for finished construction works and difficulty in obtaining new construction permits has also influenced.