Author: Ina Allkanjari
The real estate market in the Balkan capitals is experiencing significant price increases, making it increasingly difficult to buy a home. This trend is particularly worrisome, considering that household incomes have not kept pace with price increases, creating new challenges for potential buyers across the region.
Egzona, a 28-year-old from Pristina, tells Sinjalizo that buying an apartment in Europe's newest capital requires a lot of financial planning, although the risks of having the ownership of the apartment documented are great.
"The prices in recent years have increased a lot and not only in the center. I would say that prices start from a minimum of 1000 euros per square meter in most neighborhoods."
For the citizens of Kosovo, the problem is not only the price of buying an apartment in the capital, Pristina, but also the provision of legalization documentation, the absence of which is a risk for the recognition of ownership.
"The dose of risk comes from the fact that many of the buildings are not completely legalized, so with the purchase, we must keep in mind that there may be legal problems with the documentation, among other things," says the 28-year-old.
In terms of property costs and prices, in recent years, the Sarajevo property market has also presented major challenges for young people aspiring to buy an apartment. AZ, a 30-year-old from Sarajevo, tells Sinjalizo about the problems faced by citizens trying to secure a house in the capital of Bosnia.
“Since the recovery of markets after COVID-19 and especially since the Russian invasion of Ukraine, property prices in Sarajevo have skyrocketed!” says AZ
The young man, who has been looking to buy an apartment for a long time, has faced extremely high prices.
"Depending on the area of the city, the price per square meter ranges from 1200 to 4000 euros, with newly built apartments. The old town and parts of the city center are the most expensive. In the suburbs, the 58 m2 apartment costs 130.000 euros, from where you need more than 30 minutes to reach the center. The same apartment near the center would be 170-200.000 euros depending on the condition", he said.
AZ also dwells on banks and the possibilities that young people have to get a loan in Sarajevo.
"Banks are inclined to grant loans, but the interest rates are also high, depending on the type and duration of the loan. When it comes to government subsidies, the Sarajevo Canton Government offered 5 euros in subsidies, but due to the large number of applicants, much less was given," the 30-year-old says.
High property prices in Sarajevo have made buying an apartment a big challenge for newly married couples.
"When it comes to the possibility of buying an apartment, they can only do so if they both have full-time jobs and one of the salaries would have to go towards monthly loan installments," says AZ
In comparison, Tirana faces similar challenges. Prices for one square meter in the center of Tirana reach up to €2,611.15, while outside the center they are around €1,352.36. Prices for luxury apartments in the center of Tirana can range from €200,000 to €400,000. These figures are very high compared to Pristina and reflect a real estate market that has become increasingly distant for ordinary citizens.
The capital of Albania has experienced rapid urban development and a large increase in apartment prices in recent years. While new construction has been largely concentrated in luxury properties, ordinary citizens and the middle class face major challenges in securing affordable housing. Comparing the situation in Tirana with other capitals of the Balkans, such as Pristina, Skopje, Podgorica, Sarajevo, Belgrade and Zagreb, strong contrasts and common problems are highlighted.
Regional comparison of apartment prices
According to data provided by Numbeo, the global cost of living database, the price per square meter to buy an apartment in the center of Tirana is 2,611.15 euros, while outside the center it is 1,352.36 euros. These figures place Tirana among the most expensive cities in the region, compared to the main cities of the Balkans.
To better understand the position of Tirana in the real estate market, it is important to make a comparison with the prices in other capitals of the Balkans:
– Skopje: 1,944.60 euros per square meter in the center and 1,380.82 euros outside the center.
– Prishtina: 2,000.00 euros per square meter in the center and 975.00 euros outside the center.
– Podgorica: 2,043.75 euros per square meter in the center and 1,559.38 euros outside the center.
- Tirana: 2,611.15 euros per square meter in the center and 1,352.36 euros outside the center.
-Sarajevo: 2,651.20 euros per square meter in the center and 1,688.03 euros outside the center.
– Belgrade: 3,844.90 euros per square meter in the center and 2,352.80 euros outside the center.
– Zagreb: 4,023.08 euros per square meter in the center and 2,833.57 euros outside the center.
From this comparison, it is clear that Tirana has high prices for apartments in the center, but remains more affordable than Zagreb and Belgrade. However, outside the center, prices in Tirana are lower than in some other capitals, but still unaffordable for many local citizens.
High prices and market distortions
In recent years, apartment prices in the capitals of the Western Balkans have seen a significant increase. The economy expert, Zef Preçi, says that the lack of housing support programs for the public administration and the needy has deepened social polarization. The expert points out that this has created opportunities for corruption and criminal investments, distorting the market and increasing the cost of living.
In Pristina, apartment prices are also on the rise, with an average price of €2,000 per square meter in the center and €975 outside the center. According to the economic expert, there is a difference that is mostly related to the specifics of the country rather than to the fact where they are addressed or what public policies support. Unlike Tirana, most of the capitals in the region have a more integrated urban development, says the expert, since according to him, the needs for new residential areas and the opportunities for investment in the construction sector are taken into consideration.
"It is enough to go to Pristina to understand that not a single centimeter of public surfaces has been occupied in a criminal manner as in Tirana with the decision-making of the municipality or the Republic's Territorial Regulation Commission. So people's well-being must be protected, from pollution, from noise, from the possibility of using green surfaces", says Preçi.
Buildings for the elite
Tirana is experiencing a population increase that is influenced not only by natural growth, but also by internal migration. Arianita Brahaj, head of "Open Data Albania", tells "Sinjalizo" that one of the main concerns is the focus of new constructions on luxury units and businesses, and not on simple housing for families with medium or low incomes. "We don't see simple buildings with 1+1 or 1+2 apartments, but we see towers and business units,” she says. This has led to an overhang of luxury properties and a lack of building permits for affordable properties. As a result, apartment prices have increased significantly, becoming unaffordable for most citizens.
Another problem raised by Brahaj is the management of the budget of the Municipality of Tirana.
"In the last year, the amount carried over from 2023 to 2024 was 10 billion ALL or almost 30% of the municipality's budget. It means that the municipality collects infrastructure taxes for new constructions and does not respond to this infrastructure tax. So we don't have new neighborhoods being created, with new roads, with new schools, with sewers where people can go and have the opportunity to move their residential area", says Brahaj. This discrepancy creates an infrastructural crisis that negatively affects the quality of life of citizens.
Another important issue is the urban service. Brahaj points out that while the Municipality promotes large projects to improve urban Services, the reality is that public transport in Tirana creates many problems. Citizens face difficulties in accessing their place of work on time and accurately, causing many of them to feel forced to buy private cars before securing a residence. "Let the municipality promote as much as it wants solutions such as electric cars, or paid municipal parking lots, this is a form of forcing people to buy a car before buying an apartment, because there is no public transport that guarantees that you can go to work in timetable", adds Brahaj.
Buying and selling apartments in Tirana
The "Fischer" index of the Bank of Albania for the second half of 2023 provides a detailed overview of the real estate sector.
The total number of properties sold was 1169 during the second half of 2023, indicating a stability of the market compared to the previous period.
A significant change has been noticed in the preferences of buyers for the location of properties. About 43% of sales realized are represented by properties located in the most preferred areas within the city. This indicates an increase in demand for properties in the city centre, perhaps reflecting a preference for easier access to Services and infrastructure.
Financing of purchases
Financing property purchases remains a major challenge for many buyers. The real estate market in Tirana is facing significant changes, influenced by the increase in the cost of credit and the economic challenges that affect the family budget. The latest data from the Albanian Bank show a slowdown in the growth of loans for home purchases, while loans for consumption have accelerated significantly. According to the "Fischer" Index of the Bank of Albania, about 60% of properties for residential and commercial use sold by agents were purchased with bank loans. In 60% of these cases, the loan covered up to 60% of the property's value.
During the second half of 2023, the loan for the purchase of housing increased by 13.1%, a slowdown of 3 percentage points compared to the first half of the year. This slowdown comes despite the high competition between banks and the easing of credit conditions in this segment.
As real estate prices continue to rise in the Balkan capitals, the dream of home ownership becomes increasingly out of reach for many citizens. Addressing these challenges requires comprehensive strategies that balance urban development with the needs of ordinary citizens, ensuring that the market remains accessible and affordable for all.
This article was created based on input provided by individuals who have chosen to speak up. Share your story, empower others and be an agent for change. Visit the website: www.acqj.al/sinjalizo-dhe-ti/
