The surge in money laundering and the investment of assets in vacant homes have rendered housing prices unattainable for many. The cost of houses has become prohibitive for the majority of the population due to high demand, while, on the other hand, a significant portion of housing stock remains empty.
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| View from Tirana, "21 Dhjetori" intersection |
The Profile of Albania for Urban Development, Housing, and Land Management, published recently by the United Nations Economic Commission for Europe, sheds light on the reasons that have made purchasing a home unaffordable for most of the population.
"While Albania has some of the highest rates of uninhabited housing in Europe, the overpopulation rate for the population exceeds 58 percent, the highest in Europe, excluding Montenegro. These structural inequalities are the result of increased levels of social and spatial inequalities. Vacancies have resulted from massive emigration from the poorest and rural areas, on the one hand, resulting in numerous deserted properties, Monitor reports.
On the other hand, wealthier groups have invested in new properties as a 'safe haven,' often leaving these properties uninhabited. This only generates further demand and price increases in high-demand areas. Money laundering has been another contributing factor to the rising housing prices in Tirana and coastal areas of Albania. Combined with low average household disposable incomes, purchasing a new home in desired areas has become unattainable for the majority. This has led to high overcrowding rates, especially among the low-income group. Tirana is one of the seven major European cities with the highest levels of housing unaffordability," the report states.
Ensuring safe, affordable, and adequate housing has been a key concern for national housing policy.
At the beginning of the report, attention is drawn to guaranteeing the right to adequate housing.
"Article 59 of the Constitution of Albania recognizes the right to adequate and affordable housing as one of the social objectives of the Albanian state. Also, Article 18 on equality ensures the protection of different social groups against any form of discrimination.
After massive privatization and informal constructions in the 1990s, the housing sector in Albania has been dominated by private homeownership, with many newly self-built homes and other buildings initially built illegally and in populated areas. The social rental housing sector (whether public, private, or mixed) represents only about 0.1 percent of the total inhabited housing and cannot compete with the private market.
The mortgage market (in this case, only houses bought from loans whose interests are subsidized by the state as part of certain programs) is also just developing, with less than 1 percent of homeowners currently paying such mortgages.
This is partly due to the important role of the informal and self-built sector, where construction activities are primarily financed through women's money and remittances. Formal organized developments (new building constructions) target high-priced housing segments in high-demand areas and are unaffordable for most of the population," the report concludes.