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What will happen in Albania’s real estate market? Will prices go up or down? Is Tirana still a hotspot for foreign investors? How is Albania’s government impacting real estate policies and taxes in 2025?
We’re constantly asked these questions because we’re deeply involved in this market. Through our work with notaries, real estate agents, and clients who buy properties in Albania, we’ve gained firsthand insights.
That’s why we created this article: to provide clear answers, insightful analysis, and a well-rounded perspective on market predictions and forecasts.
Our goal is simple: to ensure you feel informed and confident about the market without needing to look elsewhere. If you think we missed the mark or could do better, we’d love to hear your thoughts. Feel free to message us with your feedback or comments, and we’ll work hard to improve this content for you.
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1) Albania's residential property prices will rise due to limited supply and growing demand
Albania's residential property prices are climbing and show no signs of slowing down.
In 2023 and 2024, foreign investors poured money into Albania's real estate, with a 71% jump in the first quarter of 2024 alone. This surge in foreign capital is a big reason why demand is up, as international buyers are eager to tap into Albania's promising property market.
Tourism is booming, and that's pushing up demand for short-term rentals. Many property owners are converting their homes to cater to tourists, which means fewer long-term housing options for locals. New construction isn't keeping up either, thanks to regulatory and financial hurdles, so the supply of new homes is lagging behind demand.
Urbanization is another factor, with cities like Tirana, Durrës, and Vlorë becoming hotspots. These cities are turning into economic and cultural centers, attracting both locals and expatriates. The influx of expatriates and retirees, drawn by Albania's stable economy and better living standards, is adding more demand to the mix. This means urban residential properties are in short supply, pushing prices higher.
Albania's stable economic growth and improving living standards are enticing more expatriates and retirees. This growing interest is adding another layer of demand, especially in urban areas. With limited supply, prices in these cities are on the rise.
Overall, the combination of foreign investment, tourism, and urbanization is creating a perfect storm for rising property prices. With new construction projects not keeping pace, the limited supply is a key factor driving this trend.
Sources: ABNASE, LIM-EM, Statista
2) Albania's real estate prices will rise moderately as foreign investments flow in
Albania's real estate market is buzzing with foreign investments reaching €1.1 billion in 2024.
Foreign buyers are snapping up 27% of homes sold, especially in hotspots like Tirana and the coast. This surge is fueled by the allure of Albania's market to EU nationals, who find the country's tax incentives and simplified property ownership processes for non-residents quite appealing.
Albania's economy is on a steady climb, with real GDP growth projected at 3.6% in 2023 and slightly tapering to 3.3% in 2024. This economic stability creates a fertile ground for real estate investments, making the country a promising destination for those looking to invest.
Compared to its neighbors, Albania offers more affordable property prices, which is a big draw for foreign buyers. As more investors flock to the market, property prices are expected to rise, making it a smart move to get in early.
In popular areas like Tirana, the influx of foreign buyers is noticeable, with many attracted by the government's investor-friendly policies. These policies are designed to make the process of buying property as smooth as possible for non-residents.
With the combination of economic growth, attractive pricing, and supportive government policies, Albania's real estate market is poised for a moderate price increase as foreign investments continue to flow in.
Sources: Albanian Times, Elites Realty Group, IMF eLibrary
We did some research and made this infographic to help you quickly compare rental yields of the major cities in Albania versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you’re planning to invest there.
3) Durrës property values will rise as infrastructure improvements enhance connectivity to Tirana
The city of Durrës is set to experience a boost in property values thanks to major infrastructure upgrades that will improve its connection to Tirana.
By 2025, the Albanian government plans to pour 1.6 billion euros into infrastructure projects, including expanding the Tirana-Durrës highway and revamping the new port in Porto Romano. These upgrades will make travel between the two cities quicker and more convenient, which is a game-changer for daily commuters and businesses alike.
One standout project is the refurbishment of the rail line, which will cut travel time between Tirana and Durrës to just 25 to 30 minutes, down from the previous 45 to 50 minutes by bus. This improvement is expected to draw more residents and businesses to Durrës, boosting demand for both housing and commercial spaces.
As infrastructure modernizes, Durrës is likely to see an influx of new businesses and commercial developments. This business boom can drive up property values, making the area more attractive for living and investment. The buzz around Durrës as a property hotspot is growing, with average prices hitting 71,200 ALL/m² in 2024, highlighting its increasing allure.
Local media is already spotlighting Durrës as an emerging property gem, and these infrastructure projects are only adding to its appeal. The improved connectivity and business opportunities are expected to make Durrës a prime location for real estate investment.
Sources: Euronews Albania, Euronews Albania, Semantic Scholar, Invest in Albania
4) The Albanian government will introduce incentives to attract foreign real estate investments and boost the market
The Albanian government is gearing up to introduce incentives to attract more foreign real estate investments, giving the market a significant boost.
Albania's real estate market is on the rise, with a projected market volume of $119.20 billion by 2029. This growth spells opportunity for investors looking to tap into a promising market. The government is not just sitting back; they're actively promoting the sector to ensure this growth.
Prime Minister Edi Rama has ambitious plans to draw in up to 30 million foreign tourists by 2030. This influx is expected to drive up demand for short-term rentals and hospitality projects, which in turn will stimulate the real estate market. Imagine the bustling activity in cities like Tirana and coastal areas, where tourism is already a key player.
To sweeten the deal for international buyers, Albania has rolled out policies like tax incentives and simplified property ownership processes for non-residents. These measures are crafted to make investing in Albanian real estate more appealing and accessible. It's a strategic move to open doors for foreign investors.
Albania's charm isn't just in its policies; it's in the lifestyle it offers. From stunning beaches to vibrant culture, the country is becoming a hotspot for those seeking both investment and leisure. The government's efforts are paving the way for a real estate boom that aligns with the country's growing appeal.
Sources: Statista, Albanian Daily News, China-CEE Institute
5) Albania's rental market will stabilize as new housing meets growing demand
The rental market in Albania is showing signs of stabilizing as new housing developments meet growing demand.
From 2019 to 2023, the number of short-term rental listings in Albania increased by 195%, reflecting a surge in available housing. This boom is largely driven by the private sector, which has been actively involved in construction since the mid-90s. Back in 1995, about 70% of the 50,000 new housing units were privately constructed, and this trend continues today.
The Albanian government is also playing its part by allocating significant funds to housing projects, like the $12 million earmarked for 2023. This commitment is crucial in addressing the housing needs of a growing population and supporting the rental market's stability.
Foreign investment is another key player in this scenario. With Albania's stable economic growth and a thriving tourism industry, foreign investors are increasingly interested in the real estate market. This influx of investment is fueling housing development and is supported by government policies designed to attract foreign capital.
Albania's appeal to investors is not just about numbers; it's about potential. The country's strategic location and natural beauty make it an attractive destination for both tourists and investors. This has led to a booming tourism industry, which in turn boosts the demand for rental properties.
As new housing developments continue to rise, the rental market is expected to stabilize further. The combination of private sector involvement, government support, and foreign investment is creating a robust foundation for the future of Albania's real estate market.
Sources: Skift, USAID, Statista
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6) Rents in smaller Albanian cities will rise as remote workers seek affordable living
Smaller cities in Albania are becoming a hot spot for remote workers looking for affordable living.
In recent years, there's been a 195% jump in short-term rental listings in Albania, fueled by a 543% surge in demand for nightly stays. This shows a clear trend: people want homes that fit their remote work lifestyle.
As property prices in big cities like Tirana climb, folks are eyeing smaller cities where prices are easier on the wallet. Plus, with rural internet connections doubling from 2019 to 2022, these areas are now more appealing for remote work.
The Albanian government is sweetening the deal with tax breaks for digital nomads. This, along with more co-working spaces popping up, makes smaller cities even more inviting for remote workers.
Social media and news stories are buzzing about the perks of living in smaller cities, like cheaper living costs and a better quality of life. This buzz is nudging more remote workers to make the move, boosting rental demand.
Sources: Skift, Vox News, KPMG
7) Urban rental yields will stabilize as the market adapts to tenant preferences and economic conditions
In 2023 and 2024, Albania's urban population hit 1,773,980, showing a clear trend towards city living.
With more people flocking to cities like Tirana, the demand for rental properties is on the rise. Average rental yields in Tirana are at 6.09%, with some areas offering returns between 5.14% and 7.42%. This suggests that urban living is becoming increasingly attractive due to the amenities and opportunities available.
Tenants today are looking for more than just a roof over their heads. Modern amenities and energy-efficient homes are in high demand, and people are willing to pay a premium for them. For instance, a studio apartment in Tirana priced at €55,000 can yield a 7.42% return, showing how much value is placed on contemporary living standards.
Albania's economy is holding strong, with GDP growth rates of 8.1% in 2021 and 6% in 2022. This economic stability is a backbone for the rental market, ensuring that rental yields remain steady. The government's push for urban development is also playing a crucial role in this stability.
As the market adapts to these changes, urban rental yields are expected to stabilize. The combination of economic resilience and evolving tenant preferences is shaping a robust rental landscape.
Sources: Global Property Guide, BTI Project, Trading Economics
8) Middle Eastern investors will flock to Albania's coast for vacation homes
Albania is catching the eye of Middle Eastern investors eager to buy vacation homes along its stunning coastline.
In recent years, tourism in Albania has skyrocketed, with over 10 million visitors in 2023, making it one of Europe's fastest-growing tourist spots. This boom hints at a rising interest from Middle Eastern travelers. The increase in direct flights from the Middle East to Albania has made it even easier for tourists and investors to explore the country, adding to the buzz.
Investors are also drawn to Albania's competitive property prices, especially in coastal areas like Vlorë, where prices can be as low as €700 per square meter. Compared to other European coastal destinations, this is quite a bargain. The Albanian government sweetens the deal with incentives like tax exemptions for up to 10 years and VAT exemptions on imports of capital goods, making it financially attractive for foreign buyers.
Albania's location on the Adriatic Sea, paired with its Mediterranean climate, offers an ideal setting for vacation homes. The country boasts diverse landscapes, from beautiful beaches to majestic mountains, providing a range of options for those seeking a scenic retreat. Positive media coverage in Middle Eastern outlets has highlighted Albania's natural beauty and rich history, further piquing the interest of potential investors.
With its strategic location and appealing climate, Albania offers a perfect blend of accessibility and allure for vacation home seekers. The country's charm is not just in its landscapes but also in its welcoming investment environment, making it a top choice for those looking to invest in a picturesque getaway.
Sources: Luxury Tribune, Expatax, Wikipedia, Investment Albania, Lodgify
We have made this infographic to give you a quick and clear snapshot of the property market in Albania. It highlights key facts like rental prices, yields, and property costs both in city centers and outside, so you can easily compare opportunities. We’ve done some research and also included useful insights about the country’s economy, like GDP, population, and interest rates, to help you understand the bigger picture.
9) Berat will attract niche investors and create a unique market for heritage properties
The historic city of Berat is becoming a hotspot for niche investors interested in heritage properties.
Berat's charm lies in its unique architecture and cultural heritage, drawing investors who seek distinctive opportunities. The city is buzzing with heritage restoration projects, which aim to preserve its rich history. These projects are not just about maintaining old buildings; they are about breathing new life into Berat's storied past.
The Albanian government sweetens the deal with incentives for preserving historic properties. Berat's status as a national historic center and museum-town, along with the expansion of category 1 monuments, highlights its cultural significance. This governmental backing makes investing in Berat's heritage properties even more appealing.
Berat's international recognition skyrocketed when it became a UNESCO World Heritage Site in 2005, with an extension in 2008. This prestigious status not only underscores the town's historical importance but also attracts investors who are keen on properties with a rich cultural background.
Investors are drawn to Berat not just for its history but for the unique market segment it offers. The city's blend of ancient charm and modern investment opportunities creates a niche market that is hard to find elsewhere.
Sources: UNESCO, World Bank, World Heritage Site
10) Rental yields in Tirana will rise as it becomes a hub for international students and expatriates
Rental yields in Tirana are on the rise as the city transforms into a vibrant hub for international students and expatriates.
In recent years, the University of Tirana has welcomed a surge of international students, a trend that's expected to continue through 2024. This influx is driving up the demand for rental properties, making it a hot spot for investors. The city's appeal isn't just academic; it's becoming a cultural and economic magnet in the Balkans.
Expatriates are flocking to Tirana for work, drawn by its growing reputation and opportunities. The stabilization of interest rates in Albania has made financing more accessible, encouraging more people to buy properties. This financial stability is a key factor in attracting both domestic and international investors.
The Albanian government is actively working to make Tirana more attractive to foreign students and professionals. By improving infrastructure and public transport, they're enhancing the city's livability. The development of international schools and educational programs is another draw, bringing in more students and professionals and boosting rental demand.
As Tirana continues to evolve, it's becoming a prime location for those seeking a dynamic lifestyle. The city's transformation is supported by strategic government initiatives and a welcoming environment for newcomers. This makes it an ideal place for property investment, with rental yields expected to climb.
With these changes, Tirana is not just a place to live but a thriving community for international residents. The combination of educational opportunities, economic growth, and cultural vibrancy is setting the stage for a promising future in the rental market.
Sources: EduRank, Altax, Ndiq Parate
11) Rural properties will yield higher returns as tourists seek authentic short-term rental experiences
Rural properties in Albania are becoming hot spots for short-term rentals, attracting tourists eager for authentic experiences.
With a surge in international arrivals in 2023, many visitors are venturing into Albania's countryside. This influx has more than doubled since 2016, showing a growing interest in rural destinations. Tourists aren't just looking for a place to crash; they want to dive into local culture and traditions.
Albania's rural agritourism is a perfect fit, offering farm-to-fork stays and traditional cuisine. This shift in tourist preferences is fueled by platforms like Airbnb, which promote rural stays worldwide. Successful ventures, like the Lile Family Farm near the Bënja Thermal Baths, showcase the potential of these properties.
These places blend traditional farming with top-notch local food, creating a unique experience that tourists crave. The Albanian government is also on board, investing in rural tourism and infrastructure to boost these areas' appeal. This makes rural properties even more attractive for short-term rentals.
As tourists flock to these authentic experiences, rural properties are set to offer higher yields. The combination of cultural immersion and government support is a winning formula. So, if you're considering buying property in Albania, the countryside might just be your best bet.
Sources: Story of change - Albania: investing in agritourism as an engine for shared prosperity, Cooperation in action Albania: Sustainable rural development, Albanian National Tourism Strategy 2024-2030: the 6 key pillars of development
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12) Property prices will drop in urban centers as new developments outpace demand
Albania is seeing a boom in new buildings, especially in cities like Tirana.
In Tirana, real estate agents are noticing that properties are taking longer to sell, hinting that there are more homes than buyers. This mismatch between supply and demand is likely to cause a temporary dip in property prices. The Albanian government has also been busy, issuing a lot of building permits, which means more construction projects are on the way.
Foreign investors are pulling back from Albanian real estate, which means less demand for city properties. This drop in interest from abroad is another reason why urban property prices might fall for a while. At the same time, surveys show that people are starting to prefer homes in the suburbs or countryside over city living.
This shift in buyer preference is important because it means urban properties might not be as popular, leading to lower prices. With more people looking outside the city, the demand for urban homes could decrease, putting further pressure on prices.
As new developments continue to pop up, the market might struggle to keep up with the pace. This could result in an oversupply of properties, especially in urban areas, causing prices to drop temporarily.
So, if you're thinking about buying property in Albania, keep an eye on these trends. The current situation suggests that urban property prices might be more affordable in the near future.
Sources: Telegrafi, Albanian Daily News
13) Coastal rental yields will decline due to unexpected seasonal demand fluctuations
Coastal areas in Albania are facing a decline in rental yields due to fluctuating tourist numbers.
In September 2024, Albania welcomed 4,949,244 visitors, but these numbers swing with the seasons and global economy, making rental income a bit of a gamble. The competition is heating up with places like Greece and Croatia, which have long been tourist favorites. This means tourists might opt for these destinations over Albania, impacting rental profits.
Short-term rental platforms like Airbnb have flooded the market with options, leading to a saturation of rental properties in hot tourist spots. This oversupply means property owners are vying for a limited pool of tourists, which can push rental yields down. On top of that, local rules now require property owners to get a tax ID number, known as NIPT, which could increase costs and make renting less appealing.
With more properties available, owners are finding it tough to keep their places booked. The rise in supply, especially in popular areas, means more competition for fewer tourists. This scenario is making it harder for property owners to maintain high rental yields.
Albania's charm is undeniable, but the rental market is feeling the squeeze from both increased competition and regulatory changes. As the market evolves, property owners need to adapt to these shifting dynamics to stay profitable.
Sources: CEIC Data, ForwardKeys, Skift, Albanian Times
14) Albanian consumers will prioritize energy-efficient homes to cut living costs
Albanian consumers are increasingly drawn to energy-efficient homes as a way to combat rising energy costs.
Electricity prices have been climbing, with the cost per kWh jumping from 0.098 EUR in December 2022 to 0.111 EUR by June 2024. This steady increase is pushing people to look for ways to cut down on their energy bills.
The government is stepping in with initiatives like the solar subsidy scheme, which covers 70% of the cost for solar thermal connectors. This makes it easier for families, especially those with lower incomes, to adopt energy-saving solutions.
There's also a noticeable shift in the construction industry, with more energy-efficient materials and technologies becoming available. Buildings like the Vodafone Albania Headquarters and the University of Tirana’s Faculty of Engineering are leading the way by incorporating sustainable practices that slash energy use and costs.
Media outlets are buzzing about the perks of energy-efficient homes, spotlighting government programs and eco-friendly building methods. This coverage, along with influences from the EU, is nudging more Albanians to make energy efficiency a top priority.
Sources: CEIC Data, Euractiv, Constructive Voices
We made this infographic to show you how property prices in Albania compare to other big cities across the region. It breaks down the average price per square meter in city centers, so you can see how cities stack up. It’s an easy way to spot where you might get the best value for your money. We hope you like it.
15) Albania's aging population will drive demand for more senior-friendly housing options
Albania is seeing a shift towards an older population.
By 2050, the number of people aged 65 or above is expected to rise to 623,000, making up 26% of the total population. This means more folks will need homes that suit their senior years. Imagine living in a place where everything is within reach, and you don't have to worry about stairs or slippery floors.
The elderly dependency ratio is climbing, which means there are more older people compared to those of working age. This shift suggests that more resources will be needed to support the aging population. It's like having more grandparents than grandchildren around, and we need to make sure they're well taken care of.
Life expectancy in Albania is projected to hit 80 years by 2025. People are living longer, which means they need comfortable and safe places to call home for many more years. Think about having a cozy spot where you can enjoy your golden years without a hitch.
Currently, at least 91,000 elderly individuals need long-term care, but less than 2% receive formal care. This gap highlights the urgent need for more senior-friendly housing options. It's like having a big family dinner but not enough chairs for everyone to sit comfortably.
Sources: Joint SDG Fund, UN Report on Ageing in Albania, China-CEE Institute
16) A growing expatriate community will drive the real estate market in urban centers
The growing expatriate community in Albania is shaping the real estate market, especially in cities.
In 2023, Albania saw an 18.2% jump in foreigners with residence permits compared to the previous year. Many newcomers hail from Kosovo, Italy, and Turkey, and they're not just visiting—they're buying. In 2024, 27% of homes sold were snapped up by non-Albanians, with hotspots being urban areas like Tirana and the scenic coastal regions.
Foreign direct investment is also pouring in, with €1.1 billion invested in the first nine months of 2024. Real estate alone accounts for 20% of this influx, showing a keen interest from international investors. The Albanian government has rolled out the welcome mat with policies that make it easier for expatriates to buy property, further fueling this trend.
As more expatriates settle in, rental prices in popular cities are climbing. This is due to the high demand for housing in urban centers like Tirana and Durrës. The government is also working on infrastructure projects to enhance urban living, which is likely to draw even more expatriates and push real estate demand higher.
These infrastructure improvements are not just about roads and buildings; they're about creating a lifestyle that appeals to international tastes. This is part of a broader strategy to make Albania a more attractive destination for expatriates, which in turn boosts the real estate market.
With these changes, Albania is becoming a vibrant hub for expatriates, and this is reshaping the urban real estate landscape. The influx of foreign residents and investors is a key driver of this transformation.
Sources: INSTAT, Albanian Times, Statista
17) The Albanian government will enforce stricter property development rules to protect cultural heritage sites
Albania is stepping up efforts to protect its cultural heritage sites.
After the 2019 earthquake, which damaged 53 cultural heritage sites, the need for stricter regulations became clear. This disaster highlighted vulnerabilities and sparked a national conversation about the importance of preserving Albania's rich history.
Albanians are increasingly vocal about their concerns, with public protests and discussions pushing the government to act. This growing public pressure is a driving force behind the government's focus on heritage preservation.
The Albanian government is not just listening; they are taking action. They've partnered with the EU on a €40 million restoration program to repair earthquake-damaged sites, showing a strong commitment to safeguarding their cultural treasures.
International bodies like UNESCO are also in the mix, advocating for the protection of iconic sites such as Butrint and the Historic Centres of Berat and Gjirokastra. This global attention adds another layer of pressure on Albania to enforce stricter regulations.
With both local and international eyes on them, the Albanian government is poised to implement policies that will ensure the preservation of its cultural heritage for future generations.
Sources: Web Balkans, EU Projects, RJ Travel Agency
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18) New tax incentives will encourage sustainable building in residential developments
Albania is seeing a big shift towards green construction as more people want energy-efficient homes.
In Tirana, studies from 2023 and 2024 revealed that adopting sustainable building practices could slash energy use and emissions by 42%. This is vital for Albania, which aims to cut its carbon footprint by 22% by 2025. These efforts are part of a national strategy focused on sustainable development and protecting the environment.
Albania's push to join the European Union is another reason for the green building trend. Meeting EU environmental standards is crucial, and new tax incentives for sustainable practices could help achieve this. These incentives are not just about compliance; they also make financial sense for developers and homeowners.
Foreign investors are increasingly interested in Albania's green developments, seeing them as a smart investment. This growing demand could be a key factor in supporting the introduction of tax incentives for sustainable building. The market is ripe for such changes, and it aligns with Albania's broader goals.
For potential property buyers, this means more options for eco-friendly homes that not only save on energy bills but also contribute to a healthier planet. The government's commitment to green building is a win-win, offering both environmental and economic benefits.
As Albania continues to evolve, these sustainable practices are expected to become the norm, making it an exciting time for anyone looking to invest in property here.
Sources: Albania - Green Policy Platform, Construction Industry and Tourism Development in Albania, Albania Environmental Performance Reviews Third Review — Highlights
19) Property tax law changes will reduce real estate investment profitability in Albania
Changes in property tax laws are shaking up the real estate market in Albania.
In 2023, the Albanian government decided to tweak the reference market prices, especially in Tirana, which means property taxes have shot up. For residential buildings in Tirana, these reference prices now range from 81,700 ALL/m² to 228,400 ALL/m². This has led to a noticeable increase in property taxes, making it a hot topic among property owners.
With these new prices, some areas have seen their property taxes double, and properties are now being sold at 35% higher costs. This is a big deal for both individuals and businesses who own real estate. The Builders' Association of Albania has pointed out that this increased tax burden is causing a slowdown in market activity. Investors are getting cold feet, worried about the higher tax liabilities.
Real estate investors are voicing their concerns, as these changes are biting into their profits. The new tax formula offers a 1% discount for each year a property is used, but it caps at 30% of the reference prices. This means income tax liabilities are rising for sale and purchase transactions, even for those who have revalued their properties.
For those looking to invest in Albanian real estate, it's crucial to understand how these tax changes could affect your bottom line. The increased tax burden is not just a number; it's a real factor that could influence your decision to buy or sell. Investors are now more cautious, weighing the potential returns against the higher costs.
So, if you're considering buying property in Albania, especially in Tirana, keep an eye on these tax changes. They could significantly impact your investment's profitability, making it essential to stay informed and perhaps consult with local experts.
Sources: KPMG, Wikipedia, INA Media
This article gives you valuable insights, but remember, it’s not and will never be investment advice. We pull data from a range of sources to provide you with the most accurate picture possible, yet we can’t guarantee complete accuracy. Markets are difficult to predict. Make sure to do your own research and consult a professional before making any financial moves. Any risks or losses are your own responsibility.