There are some persuasive reasons to believe that Tirana could well represent a good property investment opportunity. The likelihood of Albanian admittance to the E.U. is strong especially in light of the considerable investment which the E.U. has already made in the country. Determining how much of that investment will actually filter through to vital infrastructure needs rather than end up in the pockets of officialdom is a matter for the Albanians. The country does need vital infrastructure improvement and there are many projects planned which would improve property values when, or if, they come to fruition.
Capital cities draw foreign business investment which bodes well for property price increases. Companies are represented by Vodafone and Hewlett Packard amongst others. The University of Tirana is turning out the next generation of professionals who may well remain in the country and contribute to the improving economy. The predictions are for an emerging middle class in the capital. They will be in need of rental property but have their sights set higher than the basic apartment blocks which already exist and definitely cannot be considered desirable.
Location will be a huge factor in rental returns as those who can afford to will want to live outside of the crowded living areas. The three main areas which represent the best locations are the Dajti area, overlooking the mountain, the Kashar area, and the Selita area. There is much promised investment though whether it comes through on schedule is an unknown. The Kashar area is close to the new ring road and the new hospital, and close to the new ‘planned’ road and the new ‘planned’ commercial district.
The luxury end of developments (or at least described as such and in comparison to existing housing stock may well earn the tag) makes the most sense for investment, as the emerging middle class and foreign business personnel will want bases away from the current central crop of housing apartments. The prevalent thinking is that the Albanian local population will not currently be able to acquire mortgage financing, making rental their immediate option. Off plan developments offer the best long term returns with prices ranging from euro 500-1000 per sq.mt. Rental yields are touted as being in the region of 7% but it is impossible to guesstimate on off plan and a more conservative yield of 5% should be considered.
There are lots of ‘if’s’ to consider when planning to invest in property in Tirana. It is the last underdeveloped capital for property investors to move into. Improved traffic links, more flights into Tirana airport, and the necessity of a clampdown on corruption lead to the conclusion that Tirana represents a risky investment which may well prove worth making.