Construction permits issued in Albania in the 1 st quarter of 2016

The number of real estate construction permits in the Land of Eagles has increased significantly during the first quarter of this year. The number of real estate construction permits in the Land of Eagles has increased significantly during the first quarter of this year. According to the National Institute of Statistics (INSTAT), during the period January – March there were approved in total a 65 construction permits. This amount is four times more than in the same period of 2015. The maximum number of new construction approved permits in the first quarter of this year was was as per the following regions: Tirana (18), Berat (13) and Fier (12). Based on the detailed data of INSTAT it may be noted that the majority of construction permits are new residential real estate in Albania. In the case of apartment building, most permits accounted for two-storey cottages, villas and townhouses. At the same time, in the segment of approved projects for the construction of non-residential buildings there prevailed mainly construction permits for production purposes. Notwithstanding the growing number of approved permits, these data show that the situation in the housing market and real estate in general is still difficult due to the lack of incentives for new construction. Such incentives may include severe housing in Albania prices. According to INSTAT, the construction sector has been one of the leading drivers of economic growth in the Eagles Country, in the last two years. However, it was due to mainly the implementation of major infrastructure projects (mainly in the field of energy), rather than the construction of residential and commercial properties. During the first quarter of this year, turnover of the construction sector in Albania has increased by approximately 7.6% compared to the same period last year. And despite the fact that in the first three months of 2016 the Albanian GDP grew by 2.96% on an annualized basis. INSTAT data indicate that the contribution of the construction sector and real estate transactions to GDP growth in the first quarter of 2016 amounted to 0.55 and 0.23 percentage points, respectively. Also noteworthy are the latest statistics published by the Central Bank of Albania (Banka e Shqipërisë; BSH). According to the regulator, the volume of lending to the construction sector by commercial banks for the first five months of 2016 remained stable. In the end of May 2016 the volume of issued and not yet repaid loans to the sector amounted to ALL 1.6 billion.