Albania an emerging market

Despite its Mediterranean location, Albania's property market is 'being ignored' by foreign property seekers, it is claimed. This might be about to change, however, as established real estate organisations get in on the act.

A number of factors have attracted, among others, UK-based Barrasford and Bird, and Emerging Markets Understood Ltd (EMU). Colliers consultancy has recently opened an office and RE/MAX real estate agents are contemplating buying a franchise and entering the market.

A recent report drew a favourable picture of the future of property investment in Albania. Economically, Albania saw six per cent GDP growth in 2007, while at the same time retaining relatively low living costs. Political problems had prevented construction permits from being issued for two years but this was finally resolved at the end of 2007.

Among Albania's main attractions for foreign investors looking for an overseas property are the ease of getting financing; low transaction costs; no taxes on purchase, capital gains, withholding or inheritance; no value added tax on real estate purchases; no state or wealth taxes; no transfer tax; and high capital growth.

On the down side the country, which is currently one of Europe's poorest destinations, despite positive developments, still suffers from virtually non-existent infrastructure, including its road and electricity networks. But a new ring road around Tirana which will be connected to other routes that are also under construction is expected to open in the next 18 months. A new airport at Rinas, which is just 20 minutes from the city centre and the only international airport in the country, is serviced by many of Europe's larger air carriers with direct daily flights.

Desirable units in the capital Tirana and around the coast have been appreciating by around 30 per cent per year-on-year. Most experts predict that Tirana property values will show an annual growth of about 25 per cent in the coming years.

There used to be open countryside between the airport and Tirana. Now new commercial buildings line the main road into the city and companies such as Citroen, Hewlett-Packard and Peugeot have opened distributor sites in the country. Salaries are rising and over the past six years, city-centre apartment prices have quadrupled.

But like many countries in the Balkans, the biggest problem is clean title deeds. The Albanian government is still in the process of returning property to its pre-communist owners and disputes over ownership and forged title deeds can be an issue.

'Rapid infrastructure upgrades, a central European location and low labour costs are driving industry and tourism in Albania to new levels. Incoming international companies are able to take full advantage of the country as a manufacturing and distribution hub, while tour operators such as Club Med and even Easy Cruise (budget cruise line) have identified the coastal areas as a profitable venture,' said Simon Feek, managing director of EMU.

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