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The property market reaches another record, sales reach almost 300 million euros in three months

2023-07-05 07:53:01Biznes SHKRUAR NGA REDAKSIA VOX

The property market reaches another record, sales reach almost 300 million euros

While the economy showed significant signs of slowing down in the first three months of the year and the population trend is shrinking, the real estate market continues to thrive.

The data published by INSTAT show that the gross domestic product at current prices in the real estate activity, which measures the value of economic transactions in this sector, reached 32.3 billion ALL, or almost 300 million euros in the first three months of the year.

This is the highest level of real estate market transactions ever recorded, since INSTAT has been reporting the data.

Real estate activities were the sector that had the highest impact on the growth of the economy in the first quarter. The latter expanded by 2.72% for January-March, the lowest level since the pandemic period, while "Real estate activities" contributed +0.62 percentage points. Together with construction, of 0.42 percentage points, both sectors contributed to 38% of the total growth of the economy.

Since the first quarter of 2021 the market has grown at much faster rates compared to previous periods, as shown in the graph: Real estate activity, GDP at current prices, seasonally adjusted.

The record is held by the capital, in line with the rapid increase in construction permits. According to INSTAT Statistics, in 2022, a total of construction permits were granted by the Municipality of Tirana with an area of ​​about 1.81 million square meters, about 70% of the total granted throughout the country.

Compared to a year ago, this indicator increased by about 10%, while it has marked the highest historical level, at least since 2005, when INSTAT reports detailed data by counties. In the first quarter of this year, the area of ​​permits was significantly reduced.

In contrast to the rapid growth of constructions, the population in Tirana is no longer increasing at such a fast rate.

From 2012 to 2018, INSTAT data show that the population of Tirana increased by an average of 20,000 people per year. But, since 2019, the population increase in Tirana has decreased significantly, as the capital has not escaped the trend of immigration and the gradual aging of the population.

In 2019-2020, the capital had 11 thousand more inhabitants, a figure that was halved in the following years. In 2022, the population in the capital increased by only 5.75 thousand people, which is the lowest historical increase, at least since 2011, when INSTAT reports the data.

INSTAT reported that the population of Albania in 2022 has recorded the highest decline in three years, since the pandemic period, shrinking by 1.1%, or 31.8 thousand people less.

However, the decline in the country's population has been somewhat offset by the interest of foreigners to buy, but which is higher in the coastal areas of the country.

Sales rose, but foreign investment in real estate fell in IT

Foreign investment in real estate increased significantly in the last year, although it slowed down in the first quarter. The Bank of Albania's balance of payments statistics reveal that Foreign Direct Investment (FDI) in real estate was 49 million euros, or 25% lower than the same period a year ago.

This is also the lowest quarterly flow since the beginning of 2021, as a large part of purchases in the real estate market in the first quarter does not appear to have come from foreigners.


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