The construction sector is suffering the consequences of the increase in the costs of raw materials and in the second quarter of this year has reported a decrease in both sales and volume.

According to data from the country’s statistics office INSTAT, sales have fallen by 7.3% compared to the same period a year ago and 9.3% compared to the first quarter of this year.

Meanwhile, the volume of new constructions was 5% less than the second quarter of last year and about 10% less than the first quarter of this year.

The costs of raw materials in the construction sector have increased by up to 90%, while apartment prices are on average Euro 200 to Euro 300 per square meter more expensive than in 2020.

Construction was the main contributor to easing the economic crisis caused by the pandemic, reporting growth in the past two years, culminating in 30% more sales in the second quarter of 2021.

The price of apartments in the area of the former block area in the capital Tirana and the towers reaches 5,000 euros/m². The Association of Builders says that the increase has been influenced by the cost of building materials and the high demand for houses. But rising prices are reducing the profitability of rent, both for houses in the center and in the suburbs. The increase in loan interest rates is expected to reduce demand, which may also bring down prices.