Housing construction costs decreased their growth rates in the last quarter of 2024.

According to INSTAT data, the annual change in the Construction Cost Index in the fourth quarter of 2024 was 1.2%, while a year earlier this change was 4.1%.

Compared to the same quarter of a year ago, the largest price increase is observed in the group "Salary expenses" with 4.3%, followed by the groups "Transport expenses" with 2.3%, "Machinery expenses" with 2.2%, "Other costs" with 2.0%, and "Energy expenses" with 1.7%.

On the other hand, the group "Material expenses" marked a decrease of 0.8%. Within the “Material Expenses” group, the index of the subgroup “Electrical and Communication Materials” recorded the highest decrease of 1.5%, followed by the “Construction Materials” and “Hydrosanitary and Ventilation Materials” groups, respectively, by 0.7% each.

Compared to the third quarter of 2024. The largest price increase is observed in the “Salary Expenses” group by 2.0%, followed by the “Other Costs” groups by 0.9%, “Machine Expenses” by 0.8% and “Transport Expenses” by 0.2%. On the other hand, the “Material Expenses” group recorded a decrease of 0.2%.

Within the “Material Expenditures” group, the index of the subgroup “Electrical and Communication Materials” decreased by 0.8%, followed by “Hydro-sanitary and Ventilation Materials” by 0.2% and “Construction Materials” by 0.1%.

INSTAT announced that the Construction Cost Index (for Housing) starting from the first quarter of 2024 will be calculated with the new base. The index measures the performance of prices of construction materials, labor, and other capital expenditures used in the construction of type 8-10-story dwellings).

The weights of the basket of materials have been calculated based on the cost estimates for the construction of a multi-storey dwelling obtained from construction firms. The new basket consists of 71 items of which 66 are construction materials. Prices for construction materials are collected from 237 distributors and wholesalers of construction materials.

Meanwhile, data on expenses for salaries, machinery, and transportation are taken from 97 large construction companies concentrated mainly in the Tirana district.

Construction in the capital is expected to continue at a very high pace for at least the next two to three years.

INSTAT data revealed that in 2024, the area granted for construction permits in Albania reached over 1.9 million square meters, the higher ever since 2005, when INSTAT reported data for Tirana.

Compared to the previous year, the area granted for construction increased by about 36%.