Rental price growth accelerated in May 2025

2025-07-14 07:47:00, Ekonomi CNA

The increasing pressure in the rental market has also been reflected in the overall price level.

In May 2025, average rents were 4.7 percent higher than in May 2024, INSTAT reports. This was the highest increase since December 2023.

The graph below shows that the increase in rents has been amplified after the pandemic as a result of the contraction of the supply of long-term rentals, the market's orientation towards tourism, the lack of state interventions to regulate the housing market, and demographic changes where more and more young people from the districts are transferring to Tirana.

Ten years ago in 2015-2016, annual changes in rental prices were negligible, with growth rates below 1% or even negative. However, since late 2016 and especially during 2017, the pace of growth accelerated significantly, reaching over 4% in a few months.

The pandemic period in 2020 marked a sharp slowdown in the market, with growth rates close to zero or negative. Isolation, economic uncertainty, and the temporary emigration of many citizens significantly affected rental demand.

A gradual increase began in mid-2021, becoming more evident in 2022, with growth rates exceeding 2–3%.

However, the most pronounced development occurred during 2023, when the annual growth rate of rental prices peaked at around 4.9% in February.

This phase reflects a strong return of demand in the market, perhaps influenced by growing tourism and the relocation of foreigners working in the country, especially in Tirana.

After this peak, the trend began to moderate, however, from March 2024 another strong growth phase began, culminating in May 2025 with an annual rate of 4.7%, very close to the highest level recorded two years ago. This indicates that the pressure on the rental market has returned with intensity.

After 2022, an increase in the number of foreign citizens, especially Ukrainians, Russians, Italians, and nomads, renting properties in Albania was observed, due to the still low rental prices in the Capital compared to the rest of Europe.

Also, many owners converted their apartments into tourist units, reducing the supply for long-term rentals and increasing prices for local residents.

While new construction is concentrated in luxury segments, there is a lack of affordable rental housing for middle- and low-income families. This imbalance is pushing prices up, especially in urban areas, mainly in Tirana./ Monitor Magazine