In the last few years there has been a steady and dramatic rise in tourist activity, construction and infrastructure development within Albania. While property prices and tourism rank lower than most of the major European countries, Albania is steadily climbing the charts and is primed to become an economic powerhouse. The government has drastically increased its expenditures relating to infrastructure in order to boost economic growth.

There have been major developments especially with regards to road construction and maintenance, airports, ports of entry and telecommunication systems. All this public investment has created a very healthy and positive environment to lure foreign investors.

When it comes to energy developments and environmental concerns, not much has been done within the country for close to 30 years. However, the government has recently set in motions to construct an all new and high tech thermal energy plan within its borders. Increased investment and building developments have put an increased strain on the energy infrastructure within the country and this project should help a great deal in alleviating the concerns.

Although there have been a number of obstacles to overcome in the post-communist environment in Albania, the construction industry within has become an economic powerhouse. Necessary construction caused by periods of civil unrest and an increase in United Nations financial support has allowed the construction industry to become a staggering success. Foreign investment has paved the way for new developments such as the Kukes airport, the creation of the ports of Durres and Vlore and tourism has created the need for a new wave and hotels and activity facilities.

The tourism industry alone has made it possible for all these developments to occur and the amount of visitors to the country each year is still on the rise. Easier access to the country through the construction of the Kukes airport and new ports will continue to draw more and more tourists to the country and thus, more foreign investment.

The new infrastructure developments within the financial sector have increased the appeal of Albania to foreign investors. Hotels and tourist attractions have been springing up all over the country in order to attract tourists to the beautiful coastline and historic culture that are inherent in the country. The infrastructure that has recently been put into place fully protects foreign investments and has been the building block for the country’s recent success.

Apart from agricultural land foreign citizens are able to buy property in Albania without facing any restrictions.

The buying procedure in general involves signing numerous contracts – first a reservation contract, an undertaking contract, an introductory contract and the concrete sale-purchase contract.

Once signing the reservation contract, the property is reserved for approximately 4 weeks by the buyer. This time is then used by the buyer (through the lawyer) to carry out careful checks on the property.

Although there is no obligation to have a lawyer for a property purchase in Albania, it is always suggested to use one. During the communist era (before 1990) a lot of property was confiscated by the government. However since the 1990s roughly 85% of the confiscated properties have been returned to their original owners. The outstanding 15%, situated primarily in Tirana and coastal areas are still in the process of being resolved.

To prevent a familiar problem when buying property in Albania it is highly recommended that the buyer’s lawyer must certify that the property in question is really in full ownership of the present seller and is free from any liens.

The quality of construction is also an issue at times. This is due to the fact that some developers decide to take shortcuts when building.
Once all the required documents are obtained, the ‘undertaking contract’ is signed by the buyer and seller. This indicates their agreement to buy and to sell the property in that order. And usually would include information of the timescales, payment conditions, and price conditions of the acquisition. The undertaking contract is signed in a Notary office; this is where a public official is appointed by the government to notarize legal documents.

It is usually common practice that once the introductory contract is signed a 10% down payment is paid for second hand properties. Off-plan developments usually require a bit more as down payment, this could be anywhere between 20%-40%.

To get to the final sale-purchase contract the property needs to have been paid for fully and then the contract can be signed in front of a Notary. To finalise the sale and for the titles deed to be transferred to the new owner the final contract is then registered at the Office of the Immoveable Property Registration.

Colliers International, a major real estate services firm, has been able to secured new retailers such as Euronics, Mercator and Intersport to lease space in Albania’s modern Citypark shopping centre.

Other major retailers including Calvin Klein, Lacoste, Cacharel, Toi & Moi, Societta, Altin Bas, Primo Emporio, Versace Home, One2Play and Chicco have also signed according to a statement by Colliers.

Being developed by AM Group the Citypark shopping center is a large development when you consider Albania’s population size, totalling 111,000 square meters of built up area and 3000 parking spaces it is set to become a major attraction not only for the citizens of Tirana but Albania as a whole.

The Citypark development will also be offering other important services apart from shopping that include cafés, a hotel with conference high-tech facilities, a concert hall and other leisure scenes for adults and children.

When compared to other major Shopping Centres in Europe for instance the Lakeside Shopping Centre in the UK it is still relatively small however Tirana also does not have the population size of London.

Nonetheless the Citypark shopping centre will have an impact on property prices and demand on the area around it, leading to new opportunities for investors since a lot of the land around the complex is still undeveloped.

It’s not too often that you will hear the words Albania and paradise in the same sentence, but it is a fact that currently Albania is one of the worlds newest property development hot-spots and it really is proving a paradise for buyers, investors and developers of property alike.

Whilst the current world property market has slumped the property market in Albania is proving remarkably strong.  The EU has seen its new property development market contract by almost 2% month on month recently and these figures are repeated almost throughout the world, with new projects and developments being canceled.

In Albania however the story is different.  The property market continues to expand and new projects are not being pulled.  Whilst growth has slowed the market itself is far more robust than other international options.

Why consider Albania for property development?

Obviously such growth has attracted the attention of many international property developers.  Many property investment funds have announced that they are investing in the strong Albanian market, including some of the biggest names in the world.

What is important to consider is the price.  Albania is one of Europe’s poorest nations, and as such the price of property is very low.  This makes entry onto the property ladder and into the property development industry far easier than in economically stronger nations.  With prices so low there are always interested international buyers willing to come in and try make a profit.

Because of it’s poor economy there has been no ‘property boom’ which many other countries have experienced.  The inflation of house prices never really happened in Albania, meaning that property was kept at a sensible level.  Because of this there has also been very little by way of a crash now that the world economy is struggling.

As the house prices are at such a reasonable level they are still attractive to both local people and foreign investors, meaning that there are a wide range of people to try sell any property to.  These cheap properties have meant that the market has risen at a very real, and very sustainable, growth rate.

Albania and foreign investment

So whereas Albania was previously an unattractive prospect in the property development world because it was not expanding at the same rate as other countries, now that the property world is seeing a fall in prices and production Albania’s sensible growth has meant it has suddenly become very much more attractive.

Because of this lack of foreign investment previously the number of projects has not saturated the Albanians need for new properties, and neither has it suffered from dramatic pull outs of foreign investment when the property market started struggling.

When considered alone with the weak economy of Albania meaning that prices are 75% cheaper than in other Eastern European countries, but experiencing growth rather than contraction, it is very easy to see why so many people are starting to get excited about investing in the Albanian property market.

Many people are wondering where to start with property development.  Developing properties for both fun and profit is a dream shared by many people around the world, and it has been a very lucrative business.  However the credit crunch has led to a huge slump in the property market, making property development very risky and a business model fraught with danger.

So not surprisingly many people have started looking for other markets that are not suffering such a slump in prices and buying numbers.  Internationally a lot of the world are suffering through the same problems brought on by the credit crunch slowed marketplace, but there are still some markets that are proving to be profitable to invest in.

Albania and property investment

Albania is one such country.  Unlike many countries in recent years it has not gone through what one might consider a ‘property boom’.  So high prices have always risen in a slow but consistent manner.  Until now that has made it an unattractive proposition for anyone looking for returns on their investment.

However because the country never experienced anything like as big a rise in property prices as the rest of the world it has also not seen the crash they have experienced either.  Indeed unlike the EU’s property market, which is shrinking by 2% month on month at the moment, Albania is experiencing modest but steady growth.

Great for first time property developers

Such consistent growth is perfect for anyone who is considering getting into property development as it means that the market is a far smaller risk than that of many other property markets.  With positive growth and less development over the years there is still real need for property in Albania.

The economy of Albania is also a great boost for any potential international developers.  Albania is one of the poorest countries in Europe and as such costs are going to be down considerably on what it would cost to develop elsewhere.  Materials and labor are all at far more affordable prices than many developed nations.

The property price is also of benefit to first time property developers. With prices at 75% less than even Albania’s Eastern European neighbors, and therefore much less again than countries such as Spain and Portugal, traditional property strongholds, it costs dramatically less to get your foot on the property ladder than it otherwise would.

The buyers within Albania are also far more numerous.  Because there has been no hike or crash of prices buyers within Albania are not as wary of house buying as many populations are.  With house prices still at affordable levels for locals there is a considerable number of potential buyers available.

Foreign investors are really starting to wake up to the value of property in Albania, with many property investment funds announcing that they will be putting money into the area, which gives additional buyers for the canny property developer to sell to.

Albania is proving that property development is, even in the credit crunch, a viable business model.  You just have to look further afield than you might have thought.

The property investment market has got very difficult in recent times. The credit crunch induced recession has meant that house prices are falling rather than rising and bargains and suitable investments are hard to spot. It is also a rather unfortunate fact that the same is happening almost all over the Western world, with the usual house hot-spots no longer the sure return on investment they once were.

Thankfully there are areas available to investors that are still proving to be very good investments. It is simply a case of hunting around and understanding trends and potential. It is also a matter of shopping further afield.

International property investment

Because most local property investments are now far higher risk looking for property investments internationally could well prove to be a far safer bet. Unfortunately the usual investment opportunities in Spain, Portugal and the like are proving to be suffering the same lack of returns or safety that local markets are.

So many investors are now having to think a tad more creatively and consider other opportunities, and the name that keeps cropping up time and time again in researching best countries to offer a return on investment for property is actually Albania.

Albania as a property investment target

Many property investors are unaware of the potential that Albania has. As one of Europe’s poorest economies it has long been ignored by property developers and investors as a country worthy of note. So unlike much of the world Albania has never gone through what could be termed as a ‘property boom’, its prices have only grown very steadily, making its returns not worthy of note for developers looking for big money.

However because it has not gone through that boom it has also not suffered the crash in value and confidence that has effected most of the world. Unlike EU countries, which have seen a drop of 2% month on month in the property markets, Albania’s marketplace is still growing and completing new property projects.

Foreign investment fueling growth

Albania has seen significant foreign investment in the last 5 years or so, with Hewlett-Packard, Peugeot and Citroen all opening up presences in the region of the capital city Tirane. This has led to more money being pumped into the area, further fueling the Albanian economies growth, which stands at 6% growth year on year for the past few years.

This extra investment, as well as a very significant rise in tourist numbers, has seen the property prices rise rather than fall – with some areas of Tirane improving their house prices 30% or more each year.

With such economic rise comes the attention of banks. Larger foreign banks have started developing presences within Albania, which has further caused property price increases as more and more people become used to, and have access to, credit lending, especially mortgages.

The trends within the country are for further growth of property prices, economy and tourist numbers. Certainly a very viable property investment country.

Many property investors and developers are suffering under the effects of the credit crunch.  With mortgages getting harder to find both buying and selling property has been difficult, as well as getting the credit needed for buying the tools, supplies and labor needed to develop the property.

With that in mind developers have started looking further afield to see where they can make money stretch further, and where the buying market is more buoyant and less risky than it is in many of the major nations.  Unfortunately the credit crunch has caused recession and economic uncertainty in most of the world.

However there are some markets that are still showing good growth, and it these small gems that developers are seeking to work in.

The growth of the Albanian property market

One such gem comes in the surprising shape of Albania.  At first this may come as a surprise, Albania is not a country on many peoples lips, in fact few know where it is or what it can provide.  But further examination shows it is a perfect country for property investors and developers, with a lot going for it and the likelihood of further property price growth very high indeed.

It should be noted that Albania has one of the weakest economies in Europe, which is why for so many years it has been ignored for international development and investment.  This has turned out to be of benefit to the Albanian property market.  Whilst other markets saw house prices boom and then bust with an influx of investors, developers and speculators Albania was able to make consistent and solid growth.

Whilst before this growth was not of a level to interest investors recent crashes in the worldwide property market, coupled with large foreign investment in the Albanian economy has made Albania a far more lucrative proposition.

Reasons for the growth

So Albania is now seeing property growth far in advance of its European counterparts whilst still remaining very cheap (and so allowing for new developers to get a foothold), indeed it’s land and property price comes in at 75% cheaper than its Easter European neighbors such as Greece.  With such a small cost of starting up many people are prepared to take a risk at the Albanian economy.

Furthermore there has been significant investment in Albania by multinational corporations.  Hewlett-Packard and Citroen have both opened up centers near to the Capital city of Tirana, and where big business goes the banks follow, with many Western banks getting footholds in the country.

Because of the influx of wealth and banks more people are starting to be able to get mortgages, something that was virtually unheard of in Albania until recently.  With more and more people now getting access to the kind of credit they need to buy a house there are far more potential customers for property – and it is really starting to show.  For the last two years house prices in Tirana have increased 30% year on year, quite a return on investment.

So whilst the property markets of much of the world suffers there are gems to be found, Albania is certainly proof enough of that.

Property developers have been searching the world for new markets.  The credit crunch has limited the opportunity for developers to make money in many different ways.  Difficulties gaining credit has limited buying power whilst the same problem has also cut the number of potential customers available for developed property.  Coupled with many people having less money to spend anyway, with job losses becoming all to common in much of the Western World it is far from surprising to see people considering other markets to develop in.

So international markets have become the destination of choice, with developers studying statistics of many different countries trying to assess where will provide the best RoI (return on investment) for their time, money and efforts.  And where is proving to be most popular?

Albania

That’s right, Albania.  Most people aren’t even aware of just where Albania is (Northwest border of Greece in Europe) but it is fast becoming one of the worlds biggest property hot-spots.  It has huge potential as a country for those who are looking to build or develop property for profit.

The country is one of the poorest in Europe, with a small but fast growing economy and exports limited to mostly textile based industries.  But by looking a little deeper property developers are starting to see real benefits in investing in the area.

Property prices

Property prices in Albania never underwent the mass rise that most of the Western World did, and so it has also managed to stay free of most of the crash that the world is now going through.  Rather than suffering the 2% month on month contraction of the property market that the EU is going through Albania is actually seeing modest growth in the property sector.  Also unlike much of the EU all it’s new projects and developments are going ahead, with little to no cancellation.

It is this growth in property prices that is especially appealing.  All over the Eastern European country prices are rising at steady rates, but it is in the countries capital of Tirane that property prices are performing best, with annual growth of 30% far from uncommon.

Foreign Investment

Another reason to believe that property prices in Albania are likely to continue to rise is the level of foreign investment that has started.  Large foreign companies such as Hewlett-Packard and Citroen have set up offices in the country, whilst many international banks have started opening up offices in the region.

Economic Growth

The potential for Albania as a country is only just starting to be realized.  The number of tourists coming into the country year on year is increasing exponentially, increasing the need for holiday homes and the amount of money being brought into the country.

The economy itself is starting to improve dramatically upon its poor history, with growth at 6% for the last few years running, outstripping much of Europe for growth.  Such new money, foreign investment and growth is showing that Albania really is a country with huge property development potential.