Apartment prices in Tirana are constantly rising, while wages are not rising at the same rate. According to the Bank of Albania, since 2013-2014, average apartment prices have increased by about 43% by the end of 2020. 

The average price of one square meter in the capital at the end of the first 6 months of 2021 reached 1102 euros / square meter, according to the index of "Keydata Albania", a publication by Çelësi Media Group. Prices range from about 700-800 euro / m2 in the suburbs to 4.000 euro / m2 in the towers in the city center. 

Other INSTAT data show that for the same period (2014-2020) the average salary in the country has increased by about 18% in nominal value (from 45.500 ALL per month in 2014, to 53.700 ALL per month for 2020 -n). But indexed to average annual inflation, the real wage increase is about 5% (according to Monitor calculations, based on official inflation data from INSTAT). 

While the average real monthly wages have increased by only 5% in the last 6 years, while apartment prices have risen by 40%, this has significantly reduced purchasing power, causing an Albanian family or individual to have to work much harder than before, in order to manage to buy a house. 

An individual with an average salary of 45.500 ALL in 2014 had to work for about 50.6 years to buy a house of 90 square meters, calculated at the average price of the respective year. Six years later, an individual with an average salary of 53.700 ALL will have to work for about 69.3 years, or almost 19 years more [1] (not counting getting a loan, the comparison is made to show how much power has decreased buyers from high housing prices in relation to real wage growth rates). 

In 2014, the highest salary in the country was that of a commercial manager, with about 123.000 ALL per month, while the most expensive apartment was about 2500 euros / m2. To buy a 100 square meter apartment, this manager would need 62 years of work. At the end of 2020, the highest salary in the country was 152.000 ALL, while the most expensive apartments have reached about 4000 euros / m2. As a result, this manager will have to work 90 years to buy the most expensive apartment in the capital, or about 28 years more [2]! 

In recent years, the rapid rise in apartment prices has been somewhat amortized by the devaluation of the common currency (houses are quoted mainly in euros, which has fallen from about ALL 138 to ALL 123) and the reduction of interest rates on bank mortgage loans. (from 5.5%, to about 3.6%). 

Apartments in Tirana, the same as in Milan 

The real estate index published by Numbeo, the world's largest cost-of-living database system, which measures the ratio of prices to income for real estate, ranks Tirana among the most expensive in Europe.

Numbeo ranks 267 cities in the world, according to the price-to-income ratio, which is the best indicator to measure affordability for buying an apartment (the lower this index, the better it is). 

For the Albanian capital, this index is 16.2, the same as in Milan. While apartments in Tirana, according to the standard of purchasing power are more expensive than in Vienna (12.9), Madrid (12.5), Istanbul (12.1), Zagreb (12.5), Stockholm (13.3) etc. The most expensive in Europe are Moscow (21.8), Paris (19.7), Belgrade (19.3) etc. 

[1] Data processed by Monitor based on inflation and time value for money 

[2] Data processed by Monitor based on inflation and time value for money formula

(Source: Monitor)