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Real estate sales agents claim that the undertaking of a series of investigations by SPAK against figures from the political and business fields is having an impact on the real estate sales market.
Dritan Leka underlines that the beginning of the investigations affects the market in two directions.
"First, in the negative direction: reluctance to invest, driven by the uncertainty of business continuity, receiving a salary or keeping a job, which will be reflected in the administration (public or private) at times when business owners are hit or heads of institutions for various issues.
Second, in a positive direction. Foreign clients and investors see that more and more in our country, the state is working and that the principle of informality as a myth is falling.
This will bring foreign investors, who will want to invest in this new reality, always more formal, as well as secure for their investments".
Real estate purchases from informal money (illegal activities, corruption, etc.) are estimated to have been one of the main sources that have supplied the real estate market over the years.
The growth rates of this market have been much faster than that of the economy in general.
The data published by INSTAT reveal that the gross domestic product at current prices in the real estate activity, which measures the value of economic transactions in this sector, reached 33.8 billion ALL, or almost 320 million euros in the first three months of the year, the highest ever recorded, at least since 2008, when the data is reported.
In the first quarter of the year, the value was 32.3 billion ALL, bringing the entire first six months to 66 billion ALL, or about 630 million euros.
Other data from the Bank of Albania reveal that the new loan for the purchase of apartments for the same period was 24 billion ALL (about 230 million euros), covering about 36% of purchases.
While the purchases of foreigners for the same period were about 127 million euros (20% of the total transactions).
Market operators have repeatedly claimed that around 40% of the real estate market is supplied by informal sources, a figure that is indirectly confirmed by foreign credit and purchase data.
Experts predict that the restriction of informal resources will have an impact on the demand for the purchase of real estate, as an expected amnesty has remained suspended for the time being.
Impact of pending amnesty
The market expected growth from an implementation of a fiscal amnesty that would encourage purchases in real estate, but this amnesty has remained suspended for the moment.
According to Ylli Sula, head of the "Key Data" index for real estate, high property prices reflect the builders' expectation for the possible approval of the fiscal amnesty that would legalize undeclared income abroad and within the country.
"Russia's attack on Ukraine, which brought an immediate increase in the prices of construction materials and the cost of finding labor are the objective reasons that made property prices more expensive.
While the expectation for the implementation of the amnesty is the subjective reason that influenced the increase in prices from builders.
The current prices of apartments reflect the expectations of the builders for the implementation of the amnesty. I don't think there will be another increase in property prices."
Mr. Sula recommends that the real estate market needs the implementation of capital amnesty, but the initiative should guarantee the exclusion of criminal money and not demotivate regular taxpayers.
"For this reason, the amnesty of undeclared money should be carried out with a higher tax of up to 20%, from the proposed 5 to 10%", he says.
The approval of the amnesty draft left in silence by the state institutions, according to the head of the "Future Home" real estate agency, would facilitate the declaration of income in the bank for many families looking to buy properties worth up to 50 thousand euros.
"There are many individuals who have worked for years in emigration or even within the country, doing a simple job, but in the dark, who fail to integrate the earned income into the banking system, since the banks require the history to do so. income", adds Mr. Hysenbelliu.
The draft for the fiscal amnesty was approved by the Council of Ministers in 2020, but did not pass for consideration in the Assembly, due to the debates and objections encountered by international institutions.
In June 2022, the Ministry of Finance and Economy published in public consultations the draft law on fiscal and criminal amnesty, which was welcomed by entrepreneurs and business associations, since in addition to the repatriation of capital from abroad, through voluntary declaration, it also enables the reassessment of financial statements.
The initiative has not yet passed the stage of consultation with interest groups.
The purchases of foreigners in property also decrease
Foreign investments in real estate increased significantly last year, especially on the coast, in line with the country's return to a tourist destination.
According to data from the Bank of Albania, last year, foreign investments in real estate in Albania reached the value of 291 million euros, increasing by 52% compared to the same period of the previous year.
Real estate brought in more than 21% of the total value of Foreign Direct Investment for the past year.
But, in the first 6 months, purchases by foreigners have fallen, in contrast to the upward trend of real estate sales in total.
In total, for the entire first 6 months of the year, the value of foreign investments in real estate has decreased to 127 million euros, down 14.2% compared to the first 6 months of last year./ Monitor
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