Lending for the construction sector has returned to growth this year and has reached the highest levels for at least the last eight years.

According to Bank of Albania statistics, for the first seven months of the year, the value of new loans for this sector reached Lek 28.4 billion, 39% more compared to the same period last year. In total, the active loan portfolio has reached a value of about Lek 76 billion, increasing by 7% compared to a year ago.

The record numbers of construction loans are following the positive cycle of the sector, which in recent years has been among the main contributors to economic growth. Also, construction seems to be one of the sectors that is supporting the rapid growth of lending to the economy this year.

However, to a significant extent, this increase may also be related to the financing of important road infrastructure projects, of the public-private partnership type.

Thanks to a fairly positive financial performance in recent years, the banking sector has increased its risk appetite and is appearing ready for large exposures in corporate loans.

As for residential construction and real estate in general, the banking sector, lending in recent years has experienced a new cycle of growth, driven by developments in the real estate sector, especially in the capital and the coast.

Last year, lending to this sector suffered a kind of inhibition, also related to the cycle of interest rate increases and the slowdown in price growth. However, this year it seems that business and the banking sector have been engulfed by a new wave of optimism, which is evident from the very high rate of lending growth.