Apartment prices increased significantly in the last three years, while in the second half of last year, the trend seems to have calmed down, marking a slight decrease.

But, in June, the builders again think to increase the prices in the following months.

According to the business confidence survey published by the Bank of Albania, which has interviewed builders, the latter have increased expectations for price increases in June, after pessimism in the previous two months.

The balance of answers to this question increased in June, reaching 26.2 (this balance means that 26.2% more builders think that prices will rise compared to those who think the opposite).

Builders are also optimistic about increasing their activity in the coming months. According to the Bank of Albania, the Construction Confidence Index (TBN) increased by 2.2 percentage points in June, marking the highest historical level.

This indicator is 37 percentage points above the long-term average level. The increase this month was driven by both better estimates for current construction activity and the level of current orders. Meanwhile, both employment and future price expectations rose.

The optimism of the construction business seems to be related to the improvement in orders, although the balance of the answers to the questions "How do you value the orders (contracts) currently?" it is negative at -10, but still the best level ever recorded since 2016, when the data was reported.

According to the Fischer Index of housing prices, which is calculated by the Bank of Albania on a 6-month basis, the average price of housing sold during the second 6 months of 2022 resulted in an increase of 16.6% compared to the same period a year ago. but it decreased by 9.1%, compared to the first six months of the year.

According to the Bank of Albania, this trend suggested that price growth may have entered a normalization phase, after a 28.4% increase in the first half of 2022 (compared to the previous half).

Apartment prices have increased significantly in recent years. Yes, according to the Fischer Index, from 2013, which is the base year, to the first 6 months of 2022, the house price index increased by approximately 110%, much higher than the countries of the European Union where from 2010 to in the second 3-month of 2022, apartments have become more expensive by 48%.

In Tirana, apartments have become more expensive at a fast rate. In the towers in the center, the price has reached up to 6,000 euros per square meter, while in the suburbs it already fluctuates at 1,000 euros/m2 and in the areas inside Tirana at around 1,500-3,500 euros, depending on the position.

The coast, especially the South, is another area that is attracting buyers, due to the still cheaper prices in relation to the countries of the region such as Budva in Montenegro, or Croatia, making the luxury resorts reach 3500 euros/ m2.

As apartment prices have increased at a faster pace than the incomes of families and individuals, the purchasing power has fallen significantly, making the entrances to Albania among the most expensive in Europe.

Since the first quarter of 2021 the real estate market has grown at a much faster pace compared to previous periods

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.

(Source: Monitor)