Over 15.6 billion ALL (about EUR 127 million) in construction permits were approved in Tirana alone in the first 3 months of 2021. This is according to data processed and published by INSTAT.
Across the country, the approximate value of construction permits approved for the first quarter of 2021 for buildings and engineering works is 26.6 billion ALL, or about EUR 216 million. Compared to the first quarter of 2020, the value of construction has almost doubled.
Tirana is the city with the highest number of construction permits for this period, with 72 permits out of 251 approved throughout the region. Durrës follows Tirana with 44 construction permits and Fier with 26 construction permits. Most building permits are for housing and apartments.
Across the country, the number of construction permits has increased by about 36%, compared to the same period in 2020.
Between €300-700 million in dirty money enters Albania each year, according to an estimate by the Global Initiative Against Transnational Crime Initiative (GIATOC). This money, usually from tax evasion, criminal activities, and corruption, is largely funneled into the construction sector.
In the last 3 years, an estimated €1.6 billion was laundered through the construction sector in Albania.
New constructions have flourished in Tirana, especially after 2015. Comparing the numbers for 2015 and 2020, a 5-fold increase in the overall surface area constructed and for which local and central authorities have issued permits can be noted.
A similar increase was seen in 2020 also, despite the fact that all other sectors of the economy suffered losses. Only the construction and real estate sectors reported growth during the pandemic.
The increase in the overall area ceased to construction projects and the overall growth of the sector does not reflect the country’s economic development and housing demand.
Dirty money in construction could trigger a real estate crisis, Ornela Liperi, editor-in-chief of Monitor, a business magazine, remarked.
She said that because of money laundered in the construction sector, apartment prices in Albania have gone up by 70 percent in the last 4 years. In addition, they strengthen criminal groups and their political influence.
Liperi warned that Albania risks facing an economic crash once the construction bubble bursts, bringing apartment prices down by up to 50 percent in about 10 years.