Paradox, the stock of unused properties increases, builders warn of price increases

2025-01-30 07:50:00, Ekonomi CNA

Paradox, the stock of unused properties increases, builders warn of price

In the real estate market in Tirana, the stock of unused apartments continues to remain a problem, according to real estate agents, while sales prices in the market have an upward trend.

Stela Dhami, executive manager of Colliers International Albania, claims that currently in Tirana there is a large stock of properties that are not in use and the largest ownership belongs to builders. Dhami says that based on data from builders in Tirana, the number of unused properties is over 40 thousand.

"Most of the builders also have those buyers who bought them to have them, but not necessarily to use them. They can use them if they are interested or keep them to sell later to benefit from the increase in the value of the property," she claims.

Consequently, Dhami recommends that fiscal measures are needed against empty properties in order to include them in the market and not against buyers, as is expected to happen in Spain, in order to stabilize prices.

"As for Albania, we are very far from the situation with fiscal measures that is expected to happen in Spain, because we currently have a large stock of properties that are not in use. I think that these properties could be brought to the market if there was a correct system for their taxation, so that the owners would be incentivized to bring them to the market. Currently, the level of property taxes has been low and has not influenced builders (who are also those who own the largest stock of properties) to bring them to the market and make them part of the market."

In Tirana, according to builders, sales prices are expected to increase again. In some areas, such as the one near the New Boulevard of Tirana, builders have warned of price increases of at least 15% from January 2025. The main reasons, according to them, are the increase in costs from the increase in the infrastructure impact tax and the increasing payments of workers.

Meanwhile, at the entrance to the Paris Commune in the new residential areas being developed, the maximum price in December 2024 reached 3,500 euros per square meter. Compared to the prices of 2023 (the car prices ranged from 2,600 to 2,800 euros per square meter), the increase is 25 to 35%.

The suburbs are also experiencing a high price increase trend. The Fresku area, due to the completion of some infrastructure works, has significantly increased prices. For 1+1 apartments, where demand is very high, prices are 1,200 euros per square meter. In the Astir area, prices have reached 1,300-1,400 euros per square meter and in Paskuqan 1,100 euros per square meter from 900 to 1,000 euros per square meter, which was previously the selling price for new projects under development.

Spain with limited property stock

Regarding the policy that Spain is expected to undertake for 100% taxation for foreign buyers, Stela Dhami, executive manager of "Colliers International Albania", considers it a fiscal measure that will have an impact since the property stock is limited and the increase in prices is influenced by the high demand of foreign buyers.

"The application of a 100% tax on properties purchased by non-EU citizens is a protectionist policy towards the local market and a way to control stock and prices. Spain has been facing a high influx of tourists for years, the vast majority of whom are from countries outside the EU."

In 2023 alone, 85 million tourists visited Spain. Some of them also bought property in the country, taking advantage of the warm climate. About 15% of properties in Spain are purchased by foreigners annually, especially in coastal cities such as Barcelona, ??Valencia, Costa Del Sol, the Balearic Islands, etc.

The list of buyers is topped by English citizens with 10%, followed by Germans, French, Belgians, Italians, Dutch, etc. According to data in Spain, 1 in 5 houses built today is sold to a foreign citizen.

This means that Spain is becoming an extremely attractive country for foreign buyers. But at the same time, this buying trend directly affects the market by increasing pressure on prices, especially in countries where built stock is limited.

Cities like Barcelona are truly facing a housing crisis for local residents, not only as a result of real estate purchases by foreign nationals as residences, but also from the use of these assets as hotel stock through platforms like AirBnb or Booking.com.

According to Dhami, the foreign buyers that Spain is attracting are mainly English buyers of expensive properties, which is also driving up prices.

"Out of a total of 583,000 transactions, 27,000 properties in Spain were purchased by Britons and 87,000 by other foreign nationals. Their purchase is mostly for investment, directly increasing rents for locals. The government's announcement of 100% taxation had an immediate impact, as many Britons are looking at buying property in Cyprus as an opportunity."