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

Posts Tagged ‘investment’

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.

First off the mark was Praktiker, opening a few months earlier.  But now another DIY superstore has opened, on the Tirana-Durres Highway at the turnoff to the International Airport.

94% Albanian-owned “Megatek” has launched their first Albanian store, due to the huge demand from local Albanians, who are starting to embrace home DIY and renovation.

This will be a major boost for Albanian homeowners, who currently have strong limitations to access mortgage financing in the country, due to the impact of the global economic crisis.  Easier access to stores like these and the products they offer, means they can improve their existing residence, rather than upgrade to a new one.

Please see the current images of the new superstore:

For more images please visit us on Flickr

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.

Well, the new largest shopping centre in Albania has finally opened.  After originally scheduled for opening in September 2009, construction delays pushed the opening until December, just in time for Christmas.

Clearly the Marketing Director should be fired for coming up with “The Diamond of Albania”, but Albania is still in the learning phase when it comes to marketing.

Here are the stats:

• 237,600sqm in total size
• more than 180 shops
• 550sqm indoor ice-skating rink
• Cartoon Land (for children) - 10,000sqm
• Slovenian Retailer Mercator is largest store on site (5,000sqm)
• Euronics will be second largest retailer (3,000sqm)

The location of the shopping centre is excellent, only 12km to Tirana centre, 8km to Kamez Crossing, and 5km to the Airport.  The shopping city was constructed by the local company AM Group. The total cost of the investment is estimated at EUR80 million.

Current shopping centres like QTU and Casa Italia will now have to push harder to attract the shoppers and keep the retailers.  Still, shopping will never be the same again in Albania - especially make sure you take your ice-skates with you

For more info visit http://cityparkalbania.com.  Strangely, the Colliers website www.citypark-al.com is down at time of publishing this.

More photos:

More visuals:

As I mentioned in one of my previous posts, there will be a new enormous shopping centre constructed on the  south side of Tirana in Komuna Farke.  The project will cost around EUR48 million with part-funding coming from the EBRD.

Residents in Tirana have been aware of the construction boom happening across the city for the past few years, with construction hotspots being:

• At the foot of the Dajti Mountain
• Next to the Artificial Lake
• West - from the edge of Tirana to Kashar and Kamzes and along to Durres

With a new ring road - still not yet under construction - joining the West, past the lake, to the South, the next construction boom could be about to happen on the southside, down Elbasan Road, to Komuna Farke.  This Komuna looks to shortly merge with Tirana, being only approx 4km from the centre.

Certainly, the largest shopping centre in Albania, due to be completed in 2011, may have some effect on this:

Here it is under construction in November 2009:

The area and village of Dhermi in Albania is breath-taking: amazing lush mountains, falling away to white beaches, and crystal clear water.  Situated along the Albanian Riviera, and now accessible by a tarmac highway both from Vlora and from Saranda, the potential for Dhermi is really beginning.  And tough new construction laws for “touristic zones” in Albania, should ensure Dhermi’s future is beautiful and bright, and in direct competition with similar hotspots in Montenegro.

Fresh Property Albania are excited to launch the first ever luxury resort and apartments near Dhermi/ Drymades.  Located in Kallam, this luxury development will comprise a first class hotel and only 46 residential apartments.  All buildings in the resort will be only 2 stories high (ground, first, second), in line with the touristic zone regulations.

Prices from EUR1,050 to EUR1,450/sqm. Apartments Available Include:

5 x 2 storey villas (98.73sqm to 171.81sqm):

• ground floor 2 bedroom apartments
• first and second floor duplex apartments

2 x 2 storey residential apartment buildings (56.78sqm - 81.5sqm):

• ground floor 2 bedroom apartments
• first floor 1 bedroom and 2 bedroom apartments
• second floor studio and 2 bedroom apartments

A swimming pool will be at the centre of this resort and space for free onsite parking for residents will be available. This resort is 700 meters in a straight line from the Drymades beach, or 1.3km via the road to the beach.  Currently the old road from the highway to Drymades beach is under construction with funding from the World Bank, and is due to be completed by summer 2010.

Features:

• 5 Star Hotel
• Bar/Restaurant
• Fitness Centre
• Outdoor/Indoor Swimming Pool
• 24 hour Security services
• Shuttle Bus to beach

Apartment Services:

• Cable TV
• Internet
• Cleaning services,
• Garden services
• Maintenance including pool services

Construction has already commenced on site, with the first villa-apartments expected to be ready for summer 2010, and the whole site and resort to be open by summer 2011.

This is a rare opportunity for property investors to get into the magical Albanian Riviera property market in a luxurious project.

To view the site photos taken in November 2009, please click here.

To view the site video taken in November 2009, please click here.

For more information and availability please feel free to contact Fresh Property Albania.

In September 2008, the winning architects for the new Tirana Lakeside renovation project was announced.  The architects - MVRDV - working out of the Netherlands, created an innovative and ecological plan to cover the 20ha site.

The masterplan consists of:

• 225.000m2 residential housing
• 60.000m2 offices
• 20.000m2 public buildings
• 60.000m2 retail
• hotel of 15.000m2
• 20.000m2 sport and recreational facilities
• a car park

Start of construction is planned for 2010, and the total estimated investment is 600 million Euro. The client is a group of Albanian private developers; the project is managed by Ambito Project Management, from Madrid, Spain.

It will be interested to see if construction does start next year, as originally announced.

Summer was strangely longer than usual in Saranda this year.  The masses of tourists left at the end of August, but the hotels and tours operators were strangely busy, booked up until the end of October.  So even though the students had returned to college, a lot retained jobs to keep up with the tourism demand.

While the dust is settling, the locals are getting their first chance to reflect.  This year, 2009, saw the busiest summer season ever, as 1,000s of holidaymakers poured into Saranda from Macedonia, Kosovo, Italy, Greece and a few additional European countries like Poland, Holland and Norway.

Accommodation was in very short supply during August, as many local residents opened up their homes for the first time to offer beds so that many would not have to sleep on the beach (although some really did have to).

Saranda town had some noticeable changes this year, including a new tourist office next to the beach, new funky orange street lights, and the main road into Saranda was a permanent construction site as workers began widening and improving the road and installing a new footpath.

Prices for hotels and renting apartments were also higher than last year, a big shock to some tourists expecting a cheap and empty Albanian seaside resort.

Regarding real estate, nobody can deny that Saranda is a mass construction site of residential apartment blocks.  Locals and foreigners are curious to see the effects on Saranda of the 1,000s of apartments currently under construction.  Sadly most of the projects are built to 90% or more of their plot footprint, leaving little space for gardens, trees and parking.  Some developers have even extended balconies over busy roads, which seems highly dangerous and must be illegal.

I wonder if the Saranda council will start clamping down on developers who are building these concrete monsters, ruining some vistas in Saranda, and converting this lovely seaside resort town into a concrete city.

Despite the ugly construction, prices are going up.  Holidaymakers realised this year that buying an apartment in Saranda may be a lot cheaper than renting each year, and since prices are rising, it may be a good financial investment as well.  Prices in Saranda range from EUR500 – EUR1,300 per sqm, but for a sea view the prices start closer to EUR650 per sqm.

So why is Saranda booming?

1. Roads

Newly completed roads have started to open up access.  And since most visitors to Albania still arrive by car, this is having a huge affect.  Access via the coastal road from Tirana is now under 6 hours.  And a new highway currently under construction from the border near Gomenitsa in Greece, will change the access path from the south away from Yannina (Ioannina).  This road which is due to be completed in 2012, but will offer access shortly, will cut travel time to approx 1.5 hours from the Greek border.  This will also provide a faster route to Saranda for Italians who want to bring their car across on the ferry to Gomenitsa, eliminating the need to go via Vlora.

2. Tourism

Saranda’s touristic port is receiving more and more cruise liners each year including Easy Cruise, Cruise West - Spirit of Oceanus, Holland America Line – Westerdam, Louis Cruise Lines - Louis Majesty, and Regent Seven Seas Cruises - Seven Seas Mariner.  Bus Tour companies are mass-converging on Saranda, bringing tourists from Greece, Macedonia and Kosovo.  And demand will continue to rise.  They are drawn to Saranda as more positive press reaches international holidaymakers about the amazing nearby mountains, beaches, and sites:

• Butrinti
• Lekursi Castle
• Blue Eye
• Beaches (Ksamil, Borsh, etc)

3. Saranda International Airport

It has been many years since the plans for a Saranda Airport have emerged.

Saranda Airport Impression

However in 2005, the Albanian government granted a 20 year exclusive contract for international flights

to the German-American consortium owning Tirana International Airport.  This created a major problem since an airport in Saranda only offering national flights would not generate much income for its investors, and hence has not gone ahead.
However, demand is so strong, the government are considering breaking the contract so that the airport can be built.  Watch this space….

4. Cheap property and real estate (but expensive land)

Compared to other seaside destinations on the Ionian or Adriatic sea, Saranda has very cheap real estate for the moment.  Sea view apartments can still be found from EUR650 per sqm and if prices double in the next few years, Saranda will still be the cheapest for property prices in the region.  However land prices are already very high.  Land with building permission 100m from the sea might still be found for EUR250 per sqm.  The best land to buy at the moment is on the 6th Road in Saranda where small sea view land plots may still be around EUR30,000.

5. Climate

Saranda enjoys a Mediterranean climate and warm sea waters, and averages 290 sunny days a year.  Due to the excellent climate there is potential for a long summer season from early May to end of October.

Saranda is a rapidly changing town, drawing business and students away from Gjirokastra city in the mountains.  Improving infrastructure and increasing tourism demand will only continue to support this growth.  Heading into November, and shortly 2010, summer preparations for a possibly bigger season next year are already underway.

To view the range of Saranda photos, please click here.

Some of our Tirana development real estate projects are getting closer to completion, and here are the latest images of the developments under construction…

Dajti Hill Views

To view the full range of images, please click here to visit our Flickr set.

Classic Kashar Residences Tirana

To view the full range of images, please click here to visit our Flickr set.

Tirana Lake Residences

To view the full range of images, please click here to visit our Flickr set.

On the 30th of October, Praktiker, the German DIY retail superstore owner, launched the opening of its 103rd international location on the edge of the Albanian capital Tirana in Kamez.  This is Praktiker’s 9th foreign country to branch into.

In a press release Praktiker said “Albania’s population and economic power have been growing steadily for years and the country also proved to be relatively robust in the present financial and economic crisis.”  They also mentioned that the home ownership quota in Albania is well over 90 percent and the real estate stock has a massive need for renovation and rehabilitation.

The 8,700sqm site is the first official DIY and home improvement centre in the country, offering on-site car parking and a huge range of items including:

• Power Tools
• Bicycles and Scooters
• Home tableware
• Gym equipment
• Furniture
• Bathroom furniture
• Flooring
• and More….

Over the weekend, 1,000s of Albanians visited the store, and there was even “Gregory’s Coffee” at the entrance offering the first range of “Starbucks-style” drinks that I’ve seen.  I had to try the Vanilla Caramel Latte, but for 360 Leke (EUR2.60) it’s a little pricey for the locals.

For more info check out the Praktiker Albania website: http://www.praktiker.com.al

Other Opening Weekend Pics:

For more photos, please visit Flickr here.