Albania’s beaches attract real estate buyers: Albania is the latest darling of the property market. It has miles and beautiful and pristine beaches along the Adriatic Sea. The two largest destinations in the country are the Holiday Town of Duras and the nearest resort Golem.
Of the two, Durrës is the more built, with hotels, bars, and restaurants. The interest of foreign property investors and second-home buyers is continuously increasing.
Albania is a quiet alternative to other more crowded tourist destinations. Wise travelers can soak up the sun and avoid the crowds that affect more popular beach destinations.
The number of visitors is already high: according to INSTAT, in 2014 foreign arrivals grew by 12.8% y-o-y to over 3.67 million. More than 45% of the total foreign arrivals came from the land, 4% by sea, and the remaining 5% by air.
“The future is looking bright for Albania. With the number of BA’s new flights every year, the country is set to explode as a tourist destination. One of Albania’s biggest attractions – aside from its cultural and historical attractions, Bali Mediterranean climate, and stunning beaches – is the rock-bottom cost of living.
The improvement in the housing market can be partly attributed to the offering of new flights and the lower cost of living in Albania. We are noticing a growing number of people requiring to buy property in the beautiful coastal area of Lalzit Bay recognize their use and its investment potential.
At Resort & Spa, the country’s first high-end resort, one- to two-bedroom apartments prices start at € 35,000, while three- to four-bedroom villas sell for around € 360,000. The Fine Bay Resort is just 30 minutes from Dulles and has restaurants and bars, a beach club, tennis courts, and boutique shops.
Just know about Albania’s beaches attract real estatae buyers:
Buying Guide
Buying costs are low, but the risk is high
Roundtrip transaction costs range from about 5.83% to 6.85% of the value of the asset. The bulk of the cost is the transfer tax levied by the seller at 2%. The real estate agent’s fee is payable by the buyer at 1% and by the seller at 2%.
The government is already in the process of returning property to the owners from the communist era. Buyers should beware of fake title deeds and properties with multiple owners. Many buildings and new constructions lack appropriate building permits.
Landlord and Tenant
Undeveloped rental market
The rental market primarily caters to migrants, exchange students, diplomats, and support personnel. Albania is the land of landlords due to the privatization of public housing after the fall of communism.
Places to invest and Albania’s beaches attract real estate buyers:
If you are looking for a country where investment in real estate can be maximized, Albania is a great option. It has a good geographical location, a long coastline in the Adriatic and Ionian seas, and a short flight distance from major European capitals. All these and more make it a good option to invest in real estate in suburban areas, old cities, historical centers, and rural areas.
Today, residential property in Albania is affordable compared to years to come. In short, the best time to invest in real estate in an apartment, villa, or land in Albania is now.
The Albanian real estate market is geared towards Albanian citizens and Albanians living in other countries, except for some coastal cities and villages, mostly in southern Riviera. Meanwhile, the capital city of Tirana still does not have a foreign appetite for residential property. Even foreign nationals who are looking for a commercial property they rent rather than buy.
The good thing about the real estate market in Saranda, Valora, Gajirocastra, Cupero, Borsch, Himara, Vuno, and other coastal villages is that they are not as expensive as real estate on the Ionian or other coast of the Adriatic sea. Compared to Italy where only wealthy foreign buyers can buy property in highly sought-after areas such as Cinque Terre or Como Lake Albania, other countries in the Mediterranean offer excellent properties at a fraction of the price.
The categories of people most interested in real estate in major cities such as Tirana, Duress, Elbasan, Shakodara, Jirokastra, and Korça are students and foreign nationals working in Albania. The majority of Albanian citizens are homeowners. Recently, realtors saw a growing trend of second-home buyers. They invest in real estate and rent it out. There are many ways to earn from real estate investment such as flipping for profit, renting, or Airbnb.
Local market weak
Albania is a two-speed market. And domestic demand, i.e. the non-tourist market, continues to decline as the mortgage market continues to shrink.
According to Inf-93, a Tirana-based real estate agency, property prices have increased by more than 300% from 1979 to 2007. However, since 2010, house prices have declined.
According to the bank, by the end of the second quarter of 2015, the home price index rose 2.3%, in contrast to the 3.7% annual decline in the previous quarter, thanks to improved consumer confidence and easier mortgage lending standards. Albania, the country’s central bank.
Despite this, house prices are down about 20% from the highest level seen in 2010.
Similarly, according to the country’s Statistics Institute, the housing construction cost index also increased by 0.43% y-o-y in the second quarter of 2015.
There is no restriction on the purchase of private residential property by foreigners except for agricultural land in Albania.
Rental yield
Cheapest in Europe, but lower yields
Property prices in Albania are among the cheapest in Europe, although real estate broker guesses differ. Vacant land can be purchased for as little as € 40 – € 150. The prices of newly built apartments in Tirana are around € 500 to € 800 per square meter. Luxurious units in the city center cost around € 1,000 per square meter.
Rental yield estimates are fairly low, around 5% to 7% per year. Property buyers are relying more on capital growth than their rental income for their return on investment.
Taxes and costs
Income tax in Albania is moderate
Rental Income: Rental income is taxed at the same rate of 15%, which is withheld by the tenant.
Capital Gain: Capital gains derived from the sale of Albanian assets are taxed at 15%.
Inheritance: Inheritance and gifts are subject to income tax by assessment at a special flat rate of 15%.
Resident: Residents are on their worldwide income.
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