Albania Property Market Falls into Decline

Albania property has began to feel the effects of the credit crunch, reports Balkan Insight.com. quite suddenly, falling demand has caused the banks to tighten its lending policies and developers to advertise price reductions and flexible payment terms -- the first time developer's have had to advertise.

The report however does not mention low end properties, which have previously been reported as doing well during the credit crunch based on Albania's continued economic strength. It is unclear whether the lower end of the market is also now feeling the effects.

Balkan Insight spoke to real estate agent's on the ground who told of their being flooded with with requests to advertise properties:

"Dozens of luxury apartments that costs at least €150,000, are now available for sale because many owners are eager for cash," said one real estate agent. "We have offers for commercial properties that cost up to €1million", she added.

Prices in Tirana are thought to have dropped 20-30% in the face of the demand shortfall, which has led to the market being flooded with apartments and properties for sale:

"We have 4,000 unsold apartments and several thousand square meters of office space and retail areas", said Mr. Maksim Muçi, the CEO of Albania's construction association (ACA), a powerful lobby that represents the most important companies in the market.

The situation apparently has gotten so bad that the ACA asked the government for assistance for fears that some of the more influential companies would struggle to survive the decline. The government turned down the request; Prime Minister Berisha said developers should cut their ample profit margins in order to boost sales. Sokol Olldashi the Ministry of Public Works and Transportation said:

"We can help construction if they will accept to earn less and to sell their apartments for cheaper prices."