Fiona Bosticky’s Fresh Property Albania Blog - Albania Properties, Albania Real Estate Market, Albania Estate, Albania Travel, Albania Tourism

Posts Tagged ‘Developer’

There seems to be a lot of curious people - waiting to see the effects of the global economic crisis on Albania.  Initially the government spoke out and said - “Albania is not effected”.  But now, 18 months since D-day, the effects have well and truly set in.  And not all is bad.

Firstly, let’s have a look at what the Bank of Albania says for the 4th quarter of 2009:

The ESI (Economic Sentiment Indicator) fell 5.1%, after increases in the 2nd quarter and 3rd quarter.  The decrease is directly attributed to the fall in confidence in the construction sector in Albania.  “The domestic and external demand was assessed negatively and in decline, at the economy level.”

I guess this means people have stopped buying property.  I suppose it doesnt help that banks are still not lending.

The ICI (Industry Confidence Indicator) dropped 0.6% points, “mainly because of the negative evaluation of the businesses industrial production”.  The survey clearly states that businesses saw orders for domestic and external products drop.  Looks like this means business was slow and spending was down.

The CCI (Construction Confidence Indicator) dropped 12.8%, which is the lowest historical value since this measurement was tracked in 2002.  This saw employment in the construction sector drop 5.2% as well.  It looks like the optimism developers had for 2009 picking up during and after summer, has proven incorrect.  Unfortunately, this also meant construction-related business dropped 19.3%.

The blame for these construction industry problems, seems to be pointed to: legal issues, corruption and the informal economy.  As the government has clamped down on corruption, processes for obtaining building, planning and final hypotek documents seems to be greatly extended.

The SCI (Services Confidence Indicator) fell only 0.2%.  Despite the gloomy economic outlook in this quarter, service sector businesses reported an increase in their activity and demand.  Business blamed the banks and the informal economy for the slight downturn.  Most are not looking to employ additional staff in early 2010.

The CCI (Consumer Confidence Indicator) was down only 0.5%.  Albanians were increasing their savings, and still making some major purchases.  The rise in the cost of living affected consumers, and the state of unemployment in Albania looks to possibly increase in the short term.

In Summary

By the 4th quarter of 2009, it looks like Albania has taken a hit, directly correlated to Banks (lack of finance) and Corruption.  “Businesses expectations regarding the performance of both, the economy in general and their specific activity during the first quarter of year 2010 are on the downside.”

However the “Services Industry” looks to be very well placed, leading out of the global crisis.

The construction industry is going to have to change strategy.  Constructors have been too accustomed to “good times”, which means = booming demand, booming prices since 2000, high remittances from Albanians abroad, and Albanian expats buying holiday homes.  They will need to be more flexible, more accommodating, open to new marketing ideas and strategies, and actually change the way they construct and do business.  Albanians and foreigners buying property in Albania have changed their requirements.  They are now looking for smaller apartments, better construction, more parking and more green space.

What does this mean for property prices in 2010?  Through 2009 property prices fluctuated between stable and a 15% drop across most locations on average.  Surprisingly, some prime-location property even appreciated.  For 2010, it depends on banks, consumer confidence, tourism in the summer, and the economy in general.  Albania is still a growing country, with a growing population, so 2010 may see prices return to pre-crisis levels, or even increase.

For business or property investors, now is the best time to look into Albania.  The best time to get in is when the market is down.  2010 will be a tough year in Albania, as they finally resolve the ridiculous political crisis, and get back on track.  Albania will return to its growth curve, with its huge potential for business and tourism.

To read the full report, please click here.

Due to the request of a client, who was looking for excellent offplan/ new build buy-to-let apartments in Tirana, the capital of Albania, my research has led me to some amazing conclusions - the main one being - PRICES ARE RISING!

In the centre, near the train station, prices are surprisingly around EUR1,200/sqm to EUR1,300/sqm.  Last year apartments were selling around EUR900/sqm.  That’s a 30% increase.

Also, other apartments along the River Lana, which were EUR700/sqm last year, are now EUR900 - EUREUR950/sqm this year.  That’s a 28% increase.

Eventually I found some great apartments in Rruga Don Bosko, which is also a booming part near the centre.  Just 12 - 24 months ago, prices were EUR600 - EUR700/sqm, and now prices are only EUR800/sqm, and still rising!  There are actually only 3 x one bed apartments remaining:

• 56sqm x 800 = EUR44,800
• 56sqm x 800 = EUR44,800
• 63sqm x 800 = EUR50,400

In a short time, these prices will be EUR900/sqm and then EUR1,000/sqm, as prices continue to rise.  If you would like to buy one, please contact us immediately for the payment terms.

The development will be constructed in 4 residential/commercial blocks, with the final block, currently being the only block available, as the other blocks have sold out.  Completion is expected for end 2010.

Rental Yields in and near central Tirana currently range from 5% to 8% for long term rental, and up to 15% for holiday rental.

The recommended hold period for investors in Albania is medium term (5 to 10 years) for maximum gain.

Prices in Tirana will continue to rise, as they are still the cheapest capital city real estate prices in Europe.  With central properties around EUR900 - EUR1,200, this would make Tirana rank around 73rd place for most expensive cities in the world, just after Sofia (Bulgaria) and Budapest (Hungary) - using the Global Property Guide Rankings.

NOW is definitely the time to buy… and invest!  Please contact us for more info.

To view the images on Flickr, please click here.

Election poster in Albania

Albania’s elections take place on the 28th of June 2009.  These are very important elections, at a time when Albania is in the process of proving their “Europeanism” and their proactivity for driving “western” change into the previously “eastern” nation.

The capital Tirana, and portside city of Durres are bombarded at the moment with propaganda.

The two biggest parties, the Socialist Party (led by Tirana mayor Edi Rama) and the Democratic Party (led by current PM Sali Berisha) seem to be the biggest competitors.  Other smaller “we-really-wanna-make-a-difference” parties are trying their best - LSI, G99, Republican Party, and PDS.  These are a few I’ve noticed.

It seems to be a close race with Edi and Sali neck and neck.

On the street, asking Albanians, they are not really sure who to vote for.  Albanians seem to care about better roads, visa-free travel, less corruption, and access to quality health and educational institutions.

But corruption continues to be a big topic, especially with the EU assessment team.  Corruption seems to be at work in every government party, and those who begin with bright ideas and determined minds, seem to falter and give in under the weight of corruption eventually.  How any party intends to reduce corruption will be interesting to watch.

Either way, all parties propose big changes, and some of these changes seem feasible. From July 2009, regardless of the winner, Albania will continue changing, as the country further develops its energy sector, communications sector and tourism sector.

Local tourism is currently affected as 1,000s of Albanians stay put in their hometowns awaiting to vote, and 1,000s of Albanians in Greece and other places abroad prepare to return to their homeland to vote.

Regarding property and construction, all planning permissions seem to be on hold until after the election.  Previously construction was a major area for corruption in Albania.  This is visible in locations where buildings are much higher than they should be, like in Saranda, and they are constructed to nearly 90% of the land footprint, like near the lake in Tirana, or some parts of Dajti.  Developers are greatly affected by their political alliances still, even though the corruption in construction seems to be reducing.  So it will be interesting to see who gets to build what after the elections.

The global economic crisis has now taken effect in Albania.  People have lost jobs, small businesses have shut, remittances from abroad appear to be down, and banks are giving no mortgages to foreigners abroad, and very little mortgages to Albanians.  The government has still not fully acknowledged this crisis, but everyone else agrees it has arrived.

Albania will survive the crisis ahead of its Balkan neighbours, and still looks unlikely to fall into recession.  It will temporarily stall growth in Albania for 2009-10, and after 28 June, will it be Edi or the new Democratic Party leader taking Albania forward?

We shall see….

LSI Promotion in Albania

Spartak Ngjela Poster

G99 Promo Poster Albania

Democratic Party banner

PDK Posters Albania

Socialist Party Promotion

PDS Party Promotion

Republican Party Albania

Democratic Party Albania

Socialist Party Albania

For more images please visit our Flickr Photo Set.

Tuesday, April 21, 2009

The Tirana Festival City Project will be located on west side of Tirana near Komuna Kashar, in a commercial area, on Durres Road, 2km from the centre of Tirana and 12km from the International Airport.

Currently the location holds old commercial buildings and warehouses:

View from Kashar towards centre Tirana

Due to the size of the area of this project and facilities offered, this complex may be considered a “parallel city”, where it is expected to offer:

• Residential towers and commercial centre
• Hotel
• High School
• Office Towers
• Cinema
• Park Sport Fields
• Hypermarket
• Restaurants and service areas
• Parking

This is one of the first planned complexes of this size and complexity. Three architects have submitted their designs:

First Architect

2nd Architect

3rd Architect

Durres Road has seen some changes and transformations over the past 2 years, with brand new commercial buildings opening every month, and new shopping centres, including Casa Italia, QTU and coming soon - City Park. A new overpass at Kamza crossing has eased traffic congestion and improved access, and a new hospital is currently under construction as well.

Currently property prices in this area are very low (from around EUR420-450/sqm or EUR24,000), but as the area regenerates, the prices will go up.

Kashar Zone to be regenerated

Tuesday, March 10, 2009

Le Serre New Project

Albania’s capital city, Tirana, is changing at a rapid rate. Recently mass tree-planting was done across the city down many streets. Soon Tirana will not just be a colourful city, but a leafy one as well.

The Komuna de Parisit area is changing too. Once a down-and-out location (bordering seedy), it is now becoming a luxury and hip-and-happening place to live.

Fiona in Komuna de Parisit

New developments in the area have helped, nearly every bank has opened a branch on this street, the Kristal College is at the top of Komuna de Parisit, along with the Kristal Centre - a large shopping centre, cinema and residential apartments.

The University of New York is one of the most prestigious places to study, and the limited space will put demand on property prices in the future.

Komuna de Parisit is only a few minutes drive to the centre, and walkable in 20 minutes. Also the new future ring road is planned for this area, opening up accessibility.

One of Tirana’s largest developers is currently constructing an enormously retail/ commercial and residential complex on the last space of available land here - Le Serre. The development will comprise of a luxury 4 star hotel (85 rooms), restaurant, bar, fitness, business rooms, swimming pool, underground parking and a spa/ health centre.

Unfortunately apartments are not for sale here - YET, but once completed, this project will be beautiful:

Le Serre Tirana Project

Le Serre Tirana Project

Le Serre Tirana Project

Le Serre Tirana Project

Le Serre Under Construction

Le Serre Under Construction

Want to buy in Komuna de Parisit? Prices for apartments range from EUR650 - EUR1,000/sqm.

Want to rent in Komuna de Parisit? Prices start from EUR250-350/month (1 bed) to EUR600-800/month (2 bed)

Please contact us: contact@freshpropertyalbania.com

There are no restrictions on the foreign ownership of real estate in Albania.  The buying process usually involves signing the following contracts -

• reservation agreement
• preliminary contract
• sale-purchase contract

Step 1 – Reserve property by signing reservation form and pay reservation/ holding fee.

Property Buying Process Albania

We recommend you instruct the services of a local lawyer to assist with your purchase.  If you cannot be in Albania to sign the pre-contract or if you do not plan to be available for completion you will need a Power of Attorney arranged as soon as possible.  Your lawyer can advise you with this.  Legal fees can expected to be from EUR700 - EUR1,500 for the transaction.  It helps to get a few quotes before you choose your lawyer.  Fresh Property Albania can recommend a few lawyers to contact.

Step 3 - In approximately 2 – 3 weeks, you will be sent the pre-sales/ preliminary contract from your lawyer.  You visit Albania and sign the contract, or your lawyer signs your contract on your behalf.  You then pay your first deposit for your purchase, which is usually up to 40% of the purchase price.

Step 4 – We will keep you updated with how construction is going, when your future payment instalments are due, and how your investment is appreciating and progressing.  If “Stage Payments” are required, we will inform you when these are due.

Step 5 – Completion is where both parties sign the official transfer of deed. You must have a local Notary for this step, and your lawyer can assist with this.  You do not need to personally be present to sign the transfer of deed. You may appoint a power of attorney to a third party to sign on your behalf. At completion, you pay the another instalment of the outstanding balance.  The final instalment is usually due on receipt of your official Title Deed or Hypotek.  This document shows you officially own the property.

Step 6 – Renting or Re-selling your property.  Fresh Property Albania can assist with this.

If you have any questions about the property buying process in Albania, please feel free to contact us.