On the 16th of June France’s resort chain Club Méditerranée declared that it has quit its project for the operation of a holiday complex in southern Albania due to long dispute over land ownership.

‘There’s no project for a Club Med in Albania,’ Florence Le Gall, Club Mediterranee’s director of regional development, wrote to villagers claiming ownership of the land at Kakome, about 200 kilometres south-west of the capital, Tirana.

This is a real blow to Albania’s hard work in attempting to attract major Western investment and tourists. At the same time this is also a clear indicator that there is a problem with land ownership in certain areas of Albania.

The European Union (EU) has in the past urged Albania to solve the problems over land ownership in order to attract foreign investors and meet the requirements for membership in the EU.

The 75 Million Euro holiday complex was to be built by Albanian construction company Riviera and operated by Club Med. It is understandable that after a long 5 year dispute Club Med has decided to cancel its project in Albania.

Above is an illustration of the planned holiday complex that was canceled.

It is difficult point a finger and decide who was to blame for this, however the site was supposed to be public property and there shouldn’t have been a dispute in the first place, although the locals think otherwise. It is also clear that the Albanian government needs to work harder in solving such issues.

At times land ownership problems can be avoided by just asking the locals about the property as most of them will be well informed. If you seek sufficient advice and research before you buy a property you will certainly make a safe and profitable investment.

The majority of investors do not have such problems as they invest in apartments and property in major cities where the government regulates heavily.

The mortgages in Albania are astonishingly popular. At present, there are 17 banks that offer mortgage loans in Albania. Every one of these banks is foreign owned. The benefit of this is that foreign nationals can also secure mortgages in Albania under comparatively affordable terms and conditions. With the growth of the Albanian real estate market, it is anticipated that the mortgage industry in Albania would advance towards a promising future.

Albanian Mortgage Market Highlights

- Usually, interest rates range between 7% and 8.5%
- 70%-80% LTV finance is offered
- Loans are offered for terms of 25 and 30 years
- Self-employed individuals can secure mortgage loans
- Upfront costs equivalent to 2%
- Interest-only mortgages are also offered

The time required to secure a mortgage in Albania is extensive and the procedure might be bureaucratic in nature. Though in the past few years, it has been noticed that the procedure has bettered considerably since the banks/lenders are becoming accustomed to transacting with the foreign nationals. If you obtain a mortgage in Albania, there might be some hidden costs/fees.

If you are thinking about buying a real property in Albania, mortgages in Albania are normally available for the Albanian citizens and the majority of foreign nationals. You can secure a mortgage for either buying a house or refinancing for the purpose of home renovations and other objectives decided on a case by case basis. Mortgage loans in Albania are usually offered in two types: interest-only mortgage and repayment mortgage (interest and principal). The lowest amount offered is €30,000. Nevertheless, there is no maximum limit but the loan amount should not go above 70% of purchasing price or property valuation.

Furnishing of proof of income is necessary under all circumstances. This comprises investment, pension, salary income or rental income. It is not necessary that the lender would take into consideration all of them while ascertaining the maximum loan amount that can be offered. At present, non-status loans are not provided.

Important Mortgage Lenders in Albania

Following are the names of the prominent mortgage lenders in Albania:

- American Bank of Albania
- Credins Bank
- Alpha Bank
- Tirana Bank
- Banka Kombetare Tregtare
- Credit Bank of Albania
- Pro Credit Bank
- Banka Popullore

A major milestone was recently reached in construction of the highway connecting Albania and Kosovo. This major milestone was a 5.6 kilometre tunnel which is part of the Rreshen-Kalimash road – one of the segments 170 kilometer Albania-Kosovo motorway.

The celebration ceremony was attended by Albanian Prime Minister Sali Berisha and his Kosovan counterpart Hashim Thaci. For the Albanians in the Balkans this is a major development connecting two Albanian countries and making the movement of people as easy as possible.

In his speech Berisha said “We lived today one of our wildest dreams. We did not tear down a wall today, rather a mountain that separated us”.

The motorway will create an important link with the Balkan’s main port Durres. This major infrastructure project will cut the journey time from Kosovo by 4 hours making it just a 2 hour drive.

Here are some the key facts about this project:

- About €51m ($72m) economic benefit

- 2000 Albanians working on the motorway

- €1bn ($1.4bn) the total cost of only the 61km Rreshen-Kalimash section

This has also led to a corruption investigation due to the high cost of the Rreshen-Kalimash section due to costs nearly doubling from.

Source: http://www.nce.co.uk/

All investors and tourists know all about the European hotspots when it comes to real estate and tourism. There is substantial evidence with respect to the potential there is for investment within countries such as Italy, Spain, Greece and so on. The underlying problem however is the extremely high cost that will coincide with any investment in these markets. Yes there is potential to make money but you are going to need substantial start up capital. The key to investment success is finding untapped markets that are set and primed for an economic boom. This is exactly why so many investors are rushing to get involved in the Albanian property market. Albania consists of lengthy stretches of pristine beach front and its beauty rivals that of any other major European market.

The country itself is quickly becoming known as the last, and possibly best, market on the continent that has not yet been exploited to its full potential. The heart of the country, its capital of Tirana, is in the midst of a massive economic boom as buildings, tourist attractions, hotels and a major airport are all being constructed. All major investors are predicted extreme economic growth in the area due to an increase in tourism. More and more people are starting to take notice of this uncultivated jewel along the coasts of the Adriatic Sea.

In hindsight, Albania offers all the advantages that can be found in other major tourist hotspots within Europe but at a fraction of the price. This is a statistic that will not be present for long. Over the past few years, property prices within the country have risen on an average of about 20%, and up to 200% in some of the more popular areas. There are also predictions by many seasoned investors that the price will continue to rise up to 30% annually after Albania finally becomes part of the European Union.

As an expat or foreign investor, there are no restrictions that are applied to your investment opportunities within Albania. On top of this, purchase prices are extremely low in comparison to other areas, while rental costs are significantly higher. As the market for tourist continues to rise, so will your investment in Albanian property.

The time is now to get involved is this relatively unknown investment hotspot. At the moment property prices are some of the cheapest that anyone can find in all of Europe. However, as tourism, construction and development continue to grow at a rapid pace these prices will not be in existence for long. Albania has a wealth of potential resources and untouched capital that are ripe for the picking. Investment is all about timing, and if you want to take advantage of this unexploited market, you are going to have to act fast.

Vlora is a cool city sitting by the ocean. It has staked its claim in Albania as a prime time living location due to following reasons. Vlora has very happening downtown plush with restaurants and malls, theaters and stadiums. It also has serene landscapes, quietude and scenic natural beauty. Needless to say, houses have cropped up near the ocean and are selling as hot cakes.

Top apartments, getting built over the cash-rich oceanic plots, are all making due emphasis that the rooms open up to the beautiful ocean providing a panoramic view. There is nothing more beautiful than the setting sun into the ocean. At Vlora, you get to pay well for the real estate and deserve every bit of care that you are handed.

There is need to have proper papers, a bona fide citizenship and most of all, money. If you have a pre-approved housing loan, you can negotiate heavily, as your bank secures your way of payment. Chances are that you will cut a huge bargain. You should check out that apart from the sea and sand and the view of Sazan Island, a ubiquitous sight at Vlora, you have all the amenities too.

Picture of Vlora City

In the last few years there has been a steady and dramatic rise in tourist activity, construction and infrastructure development within Albania. While property prices and tourism rank lower than most of the major European countries, Albania is steadily climbing the charts and is primed to become an economic powerhouse. The government has drastically increased its expenditures relating to infrastructure in order to boost economic growth.

There have been major developments especially with regards to road construction and maintenance, airports, ports of entry and telecommunication systems. All this public investment has created a very healthy and positive environment to lure foreign investors.

When it comes to energy developments and environmental concerns, not much has been done within the country for close to 30 years. However, the government has recently set in motions to construct an all new and high tech thermal energy plan within its borders. Increased investment and building developments have put an increased strain on the energy infrastructure within the country and this project should help a great deal in alleviating the concerns.

Although there have been a number of obstacles to overcome in the post-communist environment in Albania, the construction industry within has become an economic powerhouse. Necessary construction caused by periods of civil unrest and an increase in United Nations financial support has allowed the construction industry to become a staggering success. Foreign investment has paved the way for new developments such as the Kukes airport, the creation of the ports of Durres and Vlore and tourism has created the need for a new wave and hotels and activity facilities.

The tourism industry alone has made it possible for all these developments to occur and the amount of visitors to the country each year is still on the rise. Easier access to the country through the construction of the Kukes airport and new ports will continue to draw more and more tourists to the country and thus, more foreign investment.

The new infrastructure developments within the financial sector have increased the appeal of Albania to foreign investors. Hotels and tourist attractions have been springing up all over the country in order to attract tourists to the beautiful coastline and historic culture that are inherent in the country. The infrastructure that has recently been put into place fully protects foreign investments and has been the building block for the country’s recent success.

Apart from agricultural land foreign citizens are able to buy property in Albania without facing any restrictions.

The buying procedure in general involves signing numerous contracts – first a reservation contract, an undertaking contract, an introductory contract and the concrete sale-purchase contract.

Once signing the reservation contract, the property is reserved for approximately 4 weeks by the buyer. This time is then used by the buyer (through the lawyer) to carry out careful checks on the property.

Although there is no obligation to have a lawyer for a property purchase in Albania, it is always suggested to use one. During the communist era (before 1990) a lot of property was confiscated by the government. However since the 1990s roughly 85% of the confiscated properties have been returned to their original owners. The outstanding 15%, situated primarily in Tirana and coastal areas are still in the process of being resolved.

To prevent a familiar problem when buying property in Albania it is highly recommended that the buyer’s lawyer must certify that the property in question is really in full ownership of the present seller and is free from any liens.

The quality of construction is also an issue at times. This is due to the fact that some developers decide to take shortcuts when building.
Once all the required documents are obtained, the ‘undertaking contract’ is signed by the buyer and seller. This indicates their agreement to buy and to sell the property in that order. And usually would include information of the timescales, payment conditions, and price conditions of the acquisition. The undertaking contract is signed in a Notary office; this is where a public official is appointed by the government to notarize legal documents.

It is usually common practice that once the introductory contract is signed a 10% down payment is paid for second hand properties. Off-plan developments usually require a bit more as down payment, this could be anywhere between 20%-40%.

To get to the final sale-purchase contract the property needs to have been paid for fully and then the contract can be signed in front of a Notary. To finalise the sale and for the titles deed to be transferred to the new owner the final contract is then registered at the Office of the Immoveable Property Registration.

Colliers International, a major real estate services firm, has been able to secured new retailers such as Euronics, Mercator and Intersport to lease space in Albania’s modern Citypark shopping centre.

Other major retailers including Calvin Klein, Lacoste, Cacharel, Toi & Moi, Societta, Altin Bas, Primo Emporio, Versace Home, One2Play and Chicco have also signed according to a statement by Colliers.

Being developed by AM Group the Citypark shopping center is a large development when you consider Albania’s population size, totalling 111,000 square meters of built up area and 3000 parking spaces it is set to become a major attraction not only for the citizens of Tirana but Albania as a whole.

The Citypark development will also be offering other important services apart from shopping that include cafés, a hotel with conference high-tech facilities, a concert hall and other leisure scenes for adults and children.

When compared to other major Shopping Centres in Europe for instance the Lakeside Shopping Centre in the UK it is still relatively small however Tirana also does not have the population size of London.

Nonetheless the Citypark shopping centre will have an impact on property prices and demand on the area around it, leading to new opportunities for investors since a lot of the land around the complex is still undeveloped.

It’s not too often that you will hear the words Albania and paradise in the same sentence, but it is a fact that currently Albania is one of the worlds newest property development hot-spots and it really is proving a paradise for buyers, investors and developers of property alike.

Whilst the current world property market has slumped the property market in Albania is proving remarkably strong.  The EU has seen its new property development market contract by almost 2% month on month recently and these figures are repeated almost throughout the world, with new projects and developments being canceled.

In Albania however the story is different.  The property market continues to expand and new projects are not being pulled.  Whilst growth has slowed the market itself is far more robust than other international options.

Why consider Albania for property development?

Obviously such growth has attracted the attention of many international property developers.  Many property investment funds have announced that they are investing in the strong Albanian market, including some of the biggest names in the world.

What is important to consider is the price.  Albania is one of Europe’s poorest nations, and as such the price of property is very low.  This makes entry onto the property ladder and into the property development industry far easier than in economically stronger nations.  With prices so low there are always interested international buyers willing to come in and try make a profit.

Because of it’s poor economy there has been no ‘property boom’ which many other countries have experienced.  The inflation of house prices never really happened in Albania, meaning that property was kept at a sensible level.  Because of this there has also been very little by way of a crash now that the world economy is struggling.

As the house prices are at such a reasonable level they are still attractive to both local people and foreign investors, meaning that there are a wide range of people to try sell any property to.  These cheap properties have meant that the market has risen at a very real, and very sustainable, growth rate.

Albania and foreign investment

So whereas Albania was previously an unattractive prospect in the property development world because it was not expanding at the same rate as other countries, now that the property world is seeing a fall in prices and production Albania’s sensible growth has meant it has suddenly become very much more attractive.

Because of this lack of foreign investment previously the number of projects has not saturated the Albanians need for new properties, and neither has it suffered from dramatic pull outs of foreign investment when the property market started struggling.

When considered alone with the weak economy of Albania meaning that prices are 75% cheaper than in other Eastern European countries, but experiencing growth rather than contraction, it is very easy to see why so many people are starting to get excited about investing in the Albanian property market.

Many people are wondering where to start with property development.  Developing properties for both fun and profit is a dream shared by many people around the world, and it has been a very lucrative business.  However the credit crunch has led to a huge slump in the property market, making property development very risky and a business model fraught with danger.

So not surprisingly many people have started looking for other markets that are not suffering such a slump in prices and buying numbers.  Internationally a lot of the world are suffering through the same problems brought on by the credit crunch slowed marketplace, but there are still some markets that are proving to be profitable to invest in.

Albania and property investment

Albania is one such country.  Unlike many countries in recent years it has not gone through what one might consider a ‘property boom’.  So high prices have always risen in a slow but consistent manner.  Until now that has made it an unattractive proposition for anyone looking for returns on their investment.

However because the country never experienced anything like as big a rise in property prices as the rest of the world it has also not seen the crash they have experienced either.  Indeed unlike the EU’s property market, which is shrinking by 2% month on month at the moment, Albania is experiencing modest but steady growth.

Great for first time property developers

Such consistent growth is perfect for anyone who is considering getting into property development as it means that the market is a far smaller risk than that of many other property markets.  With positive growth and less development over the years there is still real need for property in Albania.

The economy of Albania is also a great boost for any potential international developers.  Albania is one of the poorest countries in Europe and as such costs are going to be down considerably on what it would cost to develop elsewhere.  Materials and labor are all at far more affordable prices than many developed nations.

The property price is also of benefit to first time property developers. With prices at 75% less than even Albania’s Eastern European neighbors, and therefore much less again than countries such as Spain and Portugal, traditional property strongholds, it costs dramatically less to get your foot on the property ladder than it otherwise would.

The buyers within Albania are also far more numerous.  Because there has been no hike or crash of prices buyers within Albania are not as wary of house buying as many populations are.  With house prices still at affordable levels for locals there is a considerable number of potential buyers available.

Foreign investors are really starting to wake up to the value of property in Albania, with many property investment funds announcing that they will be putting money into the area, which gives additional buyers for the canny property developer to sell to.

Albania is proving that property development is, even in the credit crunch, a viable business model.  You just have to look further afield than you might have thought.

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