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Daily rent of apartments, the bankrupt market has not yet been formalized

2024-02-19 12:25:19Biznes SHKRUAR NGA REDAKSIA VOX

Daily rent of apartments, the bankrupt market has not yet been formalized

The number of apartments and houses for rent on AirBnb or Booking has increased significantly in the country last year, due to the high flow of foreign tourists.

In Tirana for the past year, according to AIRDNA ​​data (data structure of the AirBnb platform) for "Monitor", income from properties was 11.7 million USD. For the year 2022, the revenue from the rentals of houses on AirBnb was 7.3 million USD. Compared to 1 year ago, receipts increased by 60%.

But real estate market agents predict the closure of a number of structures that are rented daily or their return for long-term rental, after legal changes to formalize them.

"Not everyone is continuing to hold these activities. Many of them are lasting 3 to 6 months, then they close. We have had cases where they close it as a business and then someone else rents the apartment to re-let it as a daily rental. Rather, these businesses are being closed by individuals who, in addition to income from employment, provided other income from short-term rent", asserts Lorina Rada from the real estate agency "Century 21 CPM".

In total, 34,834 properties were listed in Tirana for 2023, including apartments, houses or holiday villas. Compared to 2022, their number increased by 31%. The highest number of properties listed in Tirana varies between July and December, with respectively up to 3,000 properties listed per month. For 2023 the demand for net-stay increased 78%. The presence of foreign tourists in Tirana has been ascertained by the increase in the flow of attendance, especially in the main areas, such as: Pazari i Ri, near the castle of Tirana, former Block, etc.

The problem of the market is also the risk of a bubble due to prices many times lower compared to European countries, influenced by the high supply.

If you book an apartment for rent on Booking in February, their prices for 1 day start from 3,300 ALL to 10,000 ALL for a house located up to 500 meters from the center.

But what do these numbers really show?

Although according to statistics, we are dealing with an increase in requests for daily rental of boats, it is a long-term investment made by people. Which means that in order to have a house to rent, you can buy it for at least 50,000 euros, and then in other figures up to 100,000 euros or more. For this, in most cases, it is necessary to obtain a loan to make investments in this field. Let's stay a bit in this logic.

If we refer to the figures above, where we talk about an income generation of 12 million euros for 35 thousand apartments, which means an average of 350 euros per apartment. And this means investment return after more than 200 years when you bought an apartment for 100 thousand euros or 140 years when you bought it for less. This means that this type of market is difficult to survive in our country, comparing it with other countries.

Whether its formalization will lead to a regulation of the market remains to be seen. The units will raise prices and some of them will close the activity, otherwise there will be a "soap bubble" that arose from the informality of "black money".


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