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Everything you need to know is included in our Albania Property Pack
Are you considering buying real estate in the Land of Eagles? Are you thinking about when would be a suitable time to make a move?
Different individuals have different perspectives on market timing. The Albanian real estate agent you know might advise you that now is the opportune time to buy property, while your childhood friend from Tirana may suggest exercising more patience before making a decision.
At Investropa, when we create articles or update our pack of documents related to the real estate market in Albania, we make decisions based on evidence and trustworthy data rather than subjective opinions or hearsay.
We have thoroughly examined all the official reports and statistics available on government websites. Now, we have a comprehensive database of reliable information and we can help you determining whether it is currently advantageous to purchase real estate in Albania.
Have a nice read!
How is the property market in Albania now?
Albania offers, today, a stable political and economic climate
Neutral
If you want to invest in real estate, prioritize stability as it fosters consistent cash flows and long-term wealth building. It is an information you need as a foreigner buying a property in Albania.
You'll be pleased to know that Albania is indeed a stable country for investors. The last Fragile State Index reported for this country is 55.9, which is a good number.
Albania's stable political and economic climate today can be attributed to its ongoing efforts to integrate with the European Union, which has driven significant reforms in governance, rule of law, and anti-corruption measures, fostering a more transparent and accountable political environment. Additionally, the country's strategic investments in infrastructure and tourism, coupled with a growing focus on digitalization and renewable energy, have bolstered economic growth and resilience, attracting foreign investment and enhancing economic stability.
The country provides a stable platform for investment. Next, let's assess the economic projections.
Albania is on track for significant expansion
Positive
It's better to check the country's economic viability before deciding on a property purchase.
As projected by the IMF, Albania is set to conclude 2024 with a growth rate of 3.1%, which affirms the country's positive direction. As for 2025, we're talking 3.4%.
Besides that, the economy will keep growing since Albania's economy is expected to increase by 15.2% during the next 5 years, resulting in an average GDP growth rate of 3%.
The expected sustainable growth rate in Albania indicates a stable and improving economy, which can lead to increased property values and rental demand over time. For real estate investors, this means a higher potential for returns on their investments as the market continues to grow.
However, there are other factors to consider beyond GDP growth.
Albanian business owners are more and more enthusiastic about the economic outlook
Positive
The GDP growth matters for property market evaluation, but may not reflect business community sentiments. Thankfully, in Albania there is an established metric that is routinely disclosed. It's not the case for every country, so we're lucky.
The metric, commonly referred to as the Business Consumer Index (BCI), quantifies business leaders' confidence in the current and future economic conditions through surveys and assessments.
According to the Bank of Albania's data, the latest Business Confidence Index value is 17 for Albania. This is a strong score.
If we look at the data, we can see that we're on a positive trend, moving upward. The BCI score has increased, 12 months ago it was at 14.
The robust Business Confidence Index among local businesses in Albania suggests promising prospects for property investors. This strong confidence reflects an optimistic view of the country's economic future, which can result in job growth and rising incomes. Such a positive climate is likely to boost property demand, presenting a prime opportunity for investors to generate rental income and potentially see long-term property value appreciation.
Albania is providing a lot more building permits
Positive
The quantity of building permits delivered serves as a valuable indicator when determining whether it's a favorable time to purchase property in a country. When more building permits are issued, it points to a healthy and expanding property market.
We have great news for you: the number of building permits delivered is surging in Albania.
Within the past year, according to Instituti i Statistikave (INSTAT), the number of building permits delivered by the Albanian municipalities rose by 32.4%, from 1,396 to 1,849 units.
Without any doubt, the data shows that many people think it's a favorable time to invest in property.
It's worth mentioning that more real estate will become available in the market. This data suggests a potential future drop in property prices in Albania in 2025.
Albania's population is getting a lot richer
Positive
When you're looking to buy real estate, population growth and GDP per capita deserve careful consideration because:
- a growing population means more people needing homes
- a higher GDP per person means people have more money to spend on housing (which can lead to increased property value over time)
In Albania, the average GDP per capita has changed by 16.4% over the last 5 years. Very few countries have achieved superior results.
This means that, if you purchase a seaside apartment in Saranda and rent it out, you will find that each year, you'll attract more tenants with sufficient funds to cover the rent.
If you're considering purchasing and renting it out, this trend is a good thing. Then, there might be a rise in rental demand in Albanian cities like Tirana, Durrës, or Vlorë in 2025.
Properties promise modest rental yields in Albania
Neutral
Rental yield is a widely used benchmark for comparing different real estate investments.
It's the annual rental income of a property divided by its price. For example, if an Albanian property is purchased for 10,000,000 ALL and generates 500,000 ALL in annual rental income, the rental yield would be 5%.
Based on the data provided by Numbeo, rental properties in Albania promise gross rental yields from 3.0% and 5.7%. You can find a more detailed analysis (by property and areas) in our pack of documents related to the real estate market in Albania.
It suggests a satisfactory level of income relative to the property's value.
Also, as we have seen before, there might be a fall in housing prices (because of more available properties) and potential tenants are getting wealthier. Consequently, gross rental yields are very very likely to soar in Albania in 2025.
Everything you need to know is included in our Albania Property Pack
In Albania, inflation is anticipated to be minimal
Neutral
Inflation is the overall increase in the cost of living.
It's when your usual plate of byrek costs 300 Albanian lekë instead of 250 Albanian lekë a couple of years ago.
If you're contemplating investing in a property, high inflation can bring you several benefits:
- Property values tend to increase over time, leading to potential capital appreciation.
- Inflation can result in higher rental rates, thereby boosting cash flow from the property.
- Inflation reduces the real value of debt, making mortgage payments more affordable.
- Real estate can act as a hedge against inflation, preserving the value of the investment.
- Diversifying into real estate provides stability during inflationary periods.
- Tax advantages, such as depreciation deductions, can help offset the impact of inflation.
According to the IMF's estimations, over the next 5 years, Albania will have an inflation rate of 1.0%, which gives us an average yearly increase of 0.2%.
This data is suggesting that Albania is expected to have near-zero inflation then. Prices won't rise and then your property investment may not appreciate.As a foreign investor, purchasing property in Albania when the currency is high could mean paying a premium compared to times when the currency is weaker, potentially reducing the immediate value for money. However, if the investor anticipates further economic growth or increased demand in the Albanian real estate market, the long-term appreciation of the property could offset the initial currency disadvantage. Additionally, diversifying investments into a growing market like Albania might offer strategic benefits, but it's crucial to consider currency fluctuations and economic stability in the decision-making process.
Is it a good time to buy real estate in Albania then?
Time to conclude !
2025 is shaping up to be an excellent time to invest in property in Albania, thanks to its stable political and economic climate. The country has been making strides in maintaining a balanced and secure environment, which is crucial for any real estate investment. A stable political scene means fewer risks and uncertainties for property buyers, making it a more attractive option for those looking to invest in a growing market.
Albania's economy is on a promising trajectory, with an expected growth of 15.2% over the next five years, translating to an average GDP growth rate of 3% annually. This sustainable growth indicates a stable and improving economy, which is likely to lead to increased property values and rental demand over time. For real estate investors, this means a higher potential for returns on their investments as the market continues to expand and thrive.
Moreover, Albania is issuing more building permits, which is a positive sign for the real estate market. This increase in construction activity suggests that the country is preparing to meet the growing demand for housing and commercial spaces. As the population becomes wealthier, there will be a greater need for quality properties, further driving up the value of real estate investments.
Rental properties in Albania are also promising, with gross rental yields ranging from 3.0% to 5.7%, according to data from Numbeo. This, coupled with the anticipation of minimal inflation, makes Albania an attractive destination for property investors. The combination of stable economic growth, increasing wealth, and favorable rental yields creates a compelling case for buying property in Albania in 2025.
We sincerely hope this article has provided you with beneficial information!. If you need to know more, you can check our our pack of documents related to the real estate market in Albania.
-Will real estate prices go up in Albania?
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.