Albania – A New International Hotspot for Property Investment
Article: Albania is a favorite investment destination, especially for holiday homes.
Albania has become one of the hot spots of the international property markets because it is blessed with miles of pristine beaches along the Adriatic coast.
The capital, Tirana, is experiencing a construction boom and the airport has been upgraded.
- Beach locations are becoming increasingly popular and around 30% of the sales in these areas are made to foreign investors while much of the balance is accounted for by Albanians working overseas.
- Shengjin and Vlora are most favored.
Many overseas buyers come from European countries such as Britain, Ireland and Norway; but the most significant investors come from Russia.
Historic city of Berat in Albania
The residential real estate market
Activity in 2012 has definitely been higher than 2011, and with a high level of demand, prices are expected to go up – especially during the summer.
- In some locations, the increase could exceed EUR €900 per square meter.
This is particularly true of beachfront apartments.
- Land on the coast is in the range of EUR €40 to EUR €200 psm
- Apartments in Durres range from EUR €400 to EUR €500 psm
- Apartments next to the sea are EUR €900 psm
- Apartments in the coastal complexes are EUR €500 to EUR €900 psm
- Tourist villages can cost EUR €800 to EUR €1200 psm
- Prices of apartments at the seaside in Vlora, Sarande and Shengjin are EUR €500, EUR €550 to EUR €800 and EUR €450 to EUR €700 psm respectively
From Sarandë located in the south to Shkodra located in the north, there is plenty of development activity in the country.
- In a few years, there is going to be a fancy resort at Lalzit Bay with 500 properties, a brand-new hotel and a health club.
- It is hard to imagine that only about 15 years ago, this looked like a country without a future after the departure of its Communist dictators.
Buying property in Albania
Buying property is relatively low cost but there are some risks of which you should be aware.
- Costs range from 3% to 4% of the value of the property, of which the bulk is the estate agent commission (seller pays 2% and buyer pays 1%).
- You should also keep in mind that if you purchase a new house, you would have to pay extra for parking and air-conditioning.
The Albanian government is still in the process of returning property to owners from before, while under Communist rule, so you should watch out for fake title deeds and properties with multiple ownership.
- You may also find that several new developments do not have the requisite building permissions.
- However, the Albanian prime minister says that its land is purchased based on official state documents, no other claim on that land would be accepted.
Inheritance laws regarding property must also be noted:
- Unless you specify otherwise in your will, 50% of your house will go to your spouse and the rest is divided among your children.
The bottom line
If you take the necessary precautions, a holiday home in Albania could be an excellent investment. You would be able to take awesome vacations and be able to rent out your apartment when you are not using it.
There is plenty of demand in particular from holidaymakers from Germany and Italy.