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Rising housing prices and tourism, how rents are "flying"

2025-10-10 08:21:36, Ekonomi CNA

Household spending on rent has been expanding rapidly in recent years. Although the construction sector has been at its peak for years, with increasing housing supply, expanding demand from tourists and the unused stock of new buildings is pushing rents beyond the means of middle-income citizens, especially in Tirana.

In September 2025, the main component of inflation was rental prices; previously, average price increases were dominated by food.

In September 2025, inflation was 2.4%. Rent contributed 34.5 percentage points to this increase, food contributed 26.2 percentage points, and the rest came from other consumer goods groups.

According to a previous Deloitte report, increased demand from short-term tourism led to a 20% increase in rents by the end of 2024, with one-bedroom (1+1) apartments in Tirana going for 500–800 euros per month (around 8–12 euros per square meter).

Long-term data shows that from 2016 until the pandemic, annual rent increases were minimal, ranging from 0.0% – 1%.

From 2023 onwards, the pace of rental price growth began to accelerate. Throughout 2024, the index has shown continuous growth, going from around 0.9% in January, to over 3% in the spring, to reach around 5.2% in August.

In the 2025 data, it is observed that the growth has become even stronger. The rental price index in January 2025 is around 0.9%, but then it marks a strong increase in March (2.1%), April (2.5%), May (3.6%) and especially in the summer, where in July it reaches 5.4% and in September 6.6%.

Rent inflation shows that pressure on the housing market has increased significantly during the year, due to high demand from tourism and rising housing prices.

High housing prices are curbing citizens' plans to buy homes and, thus, increasing the demand for rentals.

In 2016–2020, the rental market in Albania was relatively stable, with minor fluctuations. This period coincided with an abundant supply of new apartments, especially in Tirana and coastal cities, while demand was limited due to emigration and slowing income growth rates.

The 2020 pandemic crisis, followed by restrictions on movement and the closure of the tourist market, temporarily led to a decrease in rents, keeping the index below the inflation rate.

After 2022, the panorama changed significantly. The increase in demand from tourism and the platforms Airbnb and Booking have significantly reduced the supply of long-term rentals. A large part of vacant properties, especially in Tirana, Durrës, Vlorë and Saranda, have been converted into daily rental units.

According to other data from Airbnb, about 21 thousand apartments and other residential units were available for rent at the end of 2024. These units generated a record revenue of 85 million euros, almost twice as high as in 2023.

Also, the movement of the population towards urban areas, especially towards Tirana, is a permanent impetus for the increase in rents in the capital.

Although the construction of new apartments has been intensive, due to the high price, with an average of 2000-2100 euros/m ^2, many of them have been purchased for investment or by immigrants who do not use them for permanent residence. This has created a real shortage of functional rental supply, increasing pressure on the active market./ Monitor.al