The Bank of Albania’s latest survey on consumer confidence shows that most Albanians don’t have enough capital to make major purchases or investments.
According to the survey, 88% of people interviewed couldn’t afford to purchase or build a house in the next 12 months, and roughly 61% responded that they couldn’t afford a car in the near future.
The Bank’s report also noted that house prices have risen sharply in Tirana, reaching an average of € 1,900 per square meter within the city, ranking Tirana among the most expensive capitals in the region.
This decline in purchasing power stands in contrast to the boom that the real estate market Albania has experienced in the past few years.
Over 15.6 billion ALL (about EUR 127 million) in construction permits were approved in Tirana alone in the first 3 months of 2021, according to the National Statistics Institute (INSTAT). This marked a 36% increase compared to 2020.
INSTAT has also reported that in 2020, Albania’s construction sector was the only sector of the economy to record significant growth, rather than shrink, because of the pandemic.
According to a report by the Global Initiative against Transnational Organized Crime released in May, residential prices in Albania have almost doubled between 2017 and 2020. The report concluded that Albania’s construction boom and soaring housing prices are not fuelled by higher demand for housing or growth in formal revenue, but rather by “by cash from organized crime and corruption.”
