Increased supply, demand, and costs for apartments, but prices continue growing – Bank of Albania: For one year, prices in Tirana rose by 39%, the same level of consumption in the future

In its analysis, the Bank of Albania has concluded that the real estate market, has grown three main components for the first half of this year. According to this analysis supply, demand, and construction costs have increased, and are expected to bring further price raise.

Based on survey data on the state of the real estate market and housing price trends, the Bank of Albania estimates that during these 6 months, demand, supply, and construction costs have grown significantly.

The increase in demand is visible as the volume of sales has grown. On the other hand, the decrease in the number of unsold properties, and an increase in loans for the purchase of housing, is noticed. The increase in supply is related to the steady increase in the number of building permits, accompanied by the apparent increase in construction costs.

The performance of the latter, according to the Bank of Albania, has reflected the strong growth of spending on energy, construction materials, and machinery. This has been accompanied by an increase in the surplus of construction loans from the banking sector. The stock of loans for the purchase of immovable assets from the private sector reached about 140 billion LEK at the end of this period, increasing by 8% and 16% compared to the level recorded six months and a year ago.

These developments have resulted in a significant increase in the Fischer index of housing prices in the country, in six-month and annual terms, by 28.4% and 39%, respectively. This performance of the index is determined by the increase in the average price of housing in Tirana, although prices have also increased in other areas of the country.

“Despite a more neutral stance on the performance of the housing market in the short term, market agents remain optimistic about its performance in the longer term,” the Bank of Albania states in its analysis.

Lorenc Rabeta / SCAN

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