May 2008

We knew the market for Albania was starting last year, as the economic and political conditions looked right.  Now, many more agents and developers know it too.

Now that Bulgaria, Romania and Montenegro have “peaked” in their property prices for now, there is a new flood of interest in Albania.  Everybody suddenly wants a piece of the action, and to take advantage of the next “hotspot”.  And the more time I spend in Albania, I can see why.

There are 2 separate markets in Albania from a Buy-to-Let Investor’s point of view:

1. Long Term Tenant Market
2. Tourist/ Short Term/ Holiday-Let Market

so which is better for investors?

TIRANA

Long Term Lets - The capital of Albania and the biggest buy-to-let market in the country.  Rents vary alot across the city, depending on location and the age of the property, as new builds are in higher demand than older existing property.

One Bed Apartments to rent long term in the city, start from approx EUR150/month.  In the centre, older apartments rent from EUR250/month, and more modern, nicely decorated apartments start from EUR350/month.

Short Term Lets - The holiday let market in Tirana for apartments is very new.  Only new and/or modern apartments in excellent locations are suitable for this type of let.  Rents for One Beds start from EUR30/night.

DURRES

Long Term Lets - Albania’s second city (and ex-capital) is the next highest in terms of long term rental demand.  This is due to the proximity to Tirana (35 mins drive) and the International Airport, and having the largest port in Albania which is about to be upgraded.  The port receives very high traffic from Italy.

Also the beach in Durres is a huge attraction.  One Bed Apartments in Durres rent from EUR150/month.

Short Term Lets - This coastal city becomes packed to the limit during the popular 3 summer months - June, July and August.  Proximity to the centre, the port and the beach will affect returns.  One Beds rents from EUR25/night or EUR500 for 15 days.

VLORA

Long Term Lets - A booming economic centre, a port with direct links to Italty and Corfu and an expanding university is driving rental demand in Vlora.  Prices have increased at least 20% over the past 12 months for property prices.

One Bed Apartments rent from EUR170/month.

Short Term Lets - The population of Vlora triples in summer and nightly rates are similar to Durres.  One Bed Apartments rent from EUR25/night or EUR500 for 15 days.

SARANDA

Long Term Lets - This coastal resort town opposite Corfu, is fairly new to demand for long term lets.  Still, growing tourism and tourism business, also a local college (branch of Tirana University) is influencing an increase on long term rental demand.

One beds rent from EUR120/month, depending on distance from port and town centre.

Short Term Lets - Saranda’s population quadruples in the summer and accommodation near the centre or beach can be difficult to find.  One Bed Apartments can rent from EUR30/night or 500EUR for 15 days.

In Summary

Although we believe Albania is primarily for capital growth at the moment, it is clear the rental yields, in this early stage of the market, still offer excellent potential.

With such low prices of property at the moment, yields from 6% and higher are certainly possible.

From our offices in Albania, we can offer a full service with special rates for our clients.

To view our current property in Tirana, Durres, Vlora and Saranda, please click here.

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