The high numbers "block" purchases/ Prices of apartments, towards the decline

2023-11-06 08:51:48, Ekonomi CNA

The high numbers "block" purchases/ Prices of apartments, towards the

After the construction boom of the last two years, the sector seems to be experiencing a cooling phase. In the latest Bank of Albania business confidence survey, the construction sector is not optimistic for the second month in a row.

According to the Bank, the construction confidence indicator (TBN) fell by 1.9 percentage points in October, although it remains about 15 percentage points above the long-term average.

The decline this month was driven by both less optimistic estimates of current construction activity and the level of current orders. Expectations for employment are rising and those for future prices are falling.

The construction confidence index returned to negative territory in September (-9.26), after remaining positive for almost the entire year, and in October the indicator deteriorated further to -11.2, indicating that most builders are pessimistic about future orders. This is the most negative level since October 2022.

Businesses are waiting for fewer orders. The balance of responses to the ordering contracts question was negative at -28.5, indicating that more builders expect fewer orders. This is the lowest level since October 2022.

The high numbers "block" purchases/ Prices of apartments, towards the

Businesses are asked: How do you currently value orders (order contracts)? 1. If enough (above normal); 2. Sufficient (normal for the season); 3. Not enough (below normal)

Price expectations are also down, although the balance remains positive at 8, but this is the lowest level since June 2021. Companies are asked: How do you expect the prices you will set to change over the next 3 months? 1. They will grow; 2. They will not change; 3. They will fall.

Earlier, representatives of the sector claimed for Monitor that the increase in apartment prices has started to affect the downward trend in demand for properties with a selling price above 1,500 euros/m². Real estate agents claim that even rising interest rates on loans and the lack of an amnesty for undeclared income are shrinking the number of property buyers.

The head of the "Future Home" real estate agency, Mr. Fatjon Hysenbelliu said that the demand for properties located near the center, with a selling price of over 1,500 euros/m², has fallen.

This trend has also been seen for other housing in areas close to the center. In contrast, the demand for residential apartments in buildings built in the last 2-3 years and in newly completed constructions in areas outside the Small Ring in Tirana is the same as last year.

The high numbers "block" purchases/ Prices of apartments, towards the

Even the increase in interest rates is affecting the curbing of mortgage loans. The average interest rate of new loans in lek for home purchase in July 2023 reached 4.04% from 3.57% in February 2022 according to data from the Bank of Albania.

For loans in euros, the average rate in July 2023 reached 5.32% from 3.54% in February 2022. According to the statistical data of the Bank of Albania, the value of the new home loan in January-August 2023 was 30.9 billion ALL. Compared to the same period in 2022, new home loans fell by around 3%.

Another reason for curbing demand seems to be related to the status of informal buyers. Real estate sales agents claim that the initiation of a series of investigations by SPAK against figures from the political and entrepreneurial fields is having an impact on the property sales market. real estate.

Real estate purchases from informal money (illegal activities, corruption, etc.) are estimated to have been one of the main sources that have supplied the real estate market over the years.

According to the methodology of the Bank of Albania, the balance indicator takes values ??between -100 and +100. An indicator above 0 indicates a greater number of positive responses than negative, in a given quarter./ Monitor