Tirana, the fifth most expensive city in Europe for buying a home

2025-01-15 07:30:00, Ekonomi CNA

Tirana, the fifth most expensive city in Europe for buying a home

Illustrative photo

High apartment prices and low incomes of Albanians continue to rank Tirana among the 10 most expensive cities in Europe for affordability of buying a property (calculated as the ratio of average apartment prices to average disposable household income, expressed as years of income, for a 90-square-meter apartment). According to Numbeo data for 2024, it took 15.3 years to buy an apartment in Tirana, the ninth most expensive in Europe, while in the most expensive city in Europe, Lisbon, a family needs 19.5 years to become a property owner.

Due to the high increase in apartment prices in Europe, several countries are moving towards new fiscal measures in order to alleviate the housing crisis for locals. Recently in Spain, the government is mobilizing to undertake new fiscal measures.

The proposal to impose a 100% tax on real estate buyers from non-EU countries is one of the measures intended to be taken to solve the housing crisis and the increase in prices to unaffordable levels for the country's citizens.

Spain proposes 100% tax on property purchases by non-EU citizens

If we compare the sale prices of properties in the center and outside it in Tirana, they have almost reached the same level as in Madrid. According to Numbeo data, prices per square meter in Madrid, in the area near the center for 2024 have reached 6,416 euros per square meter. In areas outside the center, sale prices have reached 3,779 euros per square meter.

In Tirana, prices in towers range from 5,000-5,500 euros per square meter according to data obtained from sales offices. In areas outside the center in Madrid, sales prices have reached 3,779 euros per square meter. At the entrance to the Paris Commune in the new residential areas that are being developed, the maximum price in December 2024 reached 3,500 euros per square meter. Compared to prices in 2023 (car prices ranged from 2,600 to 2,800 euros per square meter) the increase is 25 to 35%. Inside the Tirana Ring Road, apartment sales prices are over 2,300 euros per square meter.

While in the former Blloku area, prices are over 3,500 euros per square meter. 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 Astir, prices have reached 1,300-1,400 euros per square meter and in Paskuqan 1,100 euros per square meter. In new constructions near the New Boulevard (on the second line of construction) prices this year reached 2,000 euros from 1,700 euros per square meter last year. An increase of 15%. Real estate agents have raised concerns that due to high prices, the demand for housing by families is decreasing.

Data on the average salary level also reveals the unaffordability of Albanian families to buy apartments due to high prices. By the second quarter of 2024, the average gross monthly salary in the country reached the level of 75,114 lek according to INSTAT data. Almost half of employees with an official salary are paid less than 50 thousand lek per month and about 70% are paid at the level of the average salary in the country.

According to INSTAT data, about 45% of employees according to the official tax declaration are paid less than 50 thousand lek gross per month. In Spain, the average gross income for 2024 is calculated at the level of 2,225 euros per month, according to Eurostat. As a result, according to Numbeo, Madrid ranks 53rd in Europe for housing affordability (Tirana was ninth), where it takes 11.7 years to buy an apartment./Monitor.al