With the government’s decision to change the property reference prices, apartments in Tirana will have higher prices than they are today. The change can affect the real estate market, not only in the value of housing, but also in the increase in taxation of properties, including unoccupied ones.
For experts, the new reference prices increase costs for builders, who pass it on to the final buyer.
“What has happened with the reference prices is that it has increased the costs of the builders, so now they will pay more taxes and therefore they will charge these costs to the buyer. But we are in a market where prices have gone very high and we don’t know if the market will accept another increase in prices or if it will start to decrease” – said Armando Shkëmbi, real estate agent.
With an unstoppable demand, new buildings are added year after year, while there are still many vacant apartments, which are not being used, creating an imbalance in the market.
“Our market is actually inexplicable. In reality, there is demand in Tirana, but on the other hand, in Tirana we have an oblique development: we have many empty apartments. There are about 40,000 or 50,000 empty apartments that are not on the market either for rent or for sale, which then create this increased demand,” he emphasized.
According to the expert, the taxation of unused apartments would lead to an increase in the number of properties available on the market, and therefore prices on the market would harmonize, creating an offer of cheaper properties.
The prices are very high but on the other hand the demand continues to grow, the expert claims that there is an increase in demand also for investment reasons.
“In Tirana people buy everywhere. Immigrants buy about 15% of the new apartments that are built. 35% belong to the land owners and usually they do not sell, so about 50% of the new apartments are for sale. Immigrants, parents from the districts for children, those who have come to Tirana as young professionals, but also investors for houses they want to rent. Those who are used to Air B&B have seen the benefits of this approach, they get 2 3 4 houses to use them as AirB&B” – he concluded.
But when will this vicious circle stop? The expert says that the market has already reached peak capacity, and with this large number of properties on the market, we can only expect a gradual decrease in prices.
“The analyzes show that the price increase has come to an end. Prices have stabilized. The question is whether they will fall or not. Since we have many new buildings on the market, we can potentially achieve a low in prices, but on the other hand, sooner or later the demand will fall. My prediction is up to the next 6 months or so the prices may decrease.”
According to the decisions approved in the Council of Ministers on reference prices, for the 32 cadastral areas of Tirana, the taxable reference value per square meter has increased from 5 to 76%.
