High risk gambling can often pay off and the emerging property market in Albania is increasingly looking like a likely bet. The window of opportunity is ripe as Albania is considered for entrance to the EU in 2014. It has also received a great deal of foreign investment from world banking organisations and improvements are being made to the infrastructure of the country.
Investment in Albania to improve the country has come from OPEC, the European Investment Bank, the European Union, the European Bank for Reconstruction and the Japanese Bank for International Co-operation. Over 500 million Euros have been invested which is a positive sign for investors, particularly as the government attempts to rid the country of the old images of corruption and Mafia activities.
Currently Albanian property is far cheaper than elsewhere in Europe and the capital Tirana is the least expensive European capital city, making it an ideal investment centre. Labor costs are low and opportunities are high.
The World Bank listings of economy rankings place Albania number two in Eastern Europe for protecting investors and fourth in the ease of registering property. The Albanian government moreover is actively encouraging foreign investment with the only restriction to foreign purchases being arable land.
Property is free of all purchase taxes including VAT, and there is a flat 10% tax on all rental income and only 10% capital gains tax. Property prices are low yet have excellent growth potential as the country begins to promote tourism.
The anticipated return of much of the Albanian population from abroad to the homeland is expected to further fuel demand for rented accommodation. Property can be invested in for capital growth with a built in rental potential for either the tourist market or the home market.
Construction is booming along the coastal areas of the Adriatic and Ionian seas as well as in Tirana. Developers have purchased land and are actively constructing off plan developments which can be purchased at a discount before completion. Location is naturally the most important consideration with the coast in competition with the capital.
Coastal investment returns are dependent on the accuracy of tourist growth predictions whilst the capital is already experiencing investment from foreign companies, a rising graduate population and migration from rural areas to Tirana. Rental incomes are primarily guesstimates of between 5 – 10 %, with capital growth being anyone’s guess but likely to be high as more investors seize the opportunity and push prices higher.
With Albania tackling the improvements needed to the infrastructure, and the construction industry being strengthened through aid given by the World Bank, it would seem the gamble of making an astute investment in property in Albania should pay off well.