The official data of the real estate market in Albania shows a reality that defies the basic rules of the economy. Transaction figures from the State Cadastre Agency, ASHK, for the period 2021-2025, crossed with demographic changes and INSTAT data on building permits reveal an obvious anomaly, where the volume of constructions and property prices continue to rise, while the number of sales shrinks.
Data obtained through a right to information request at ASHK show that after a boom in 2022, apartment sales in the capital suffered a significant and continuous contraction for two years in a row, before showing stabilization and slight growth during 2025.
In a functioning economy, this should be the moment when the ground rules come into play. When demand falls and unsold inventory rises, prices must be lowered to induce buyers. However, in Tirana, property prices experienced an aggressive increase during 2023-2024, making housing a mission impossible for the middle-class citizen.
This is the essence of what experts consider the “paradox of concrete”; where instead of the market self-correcting from the lack of traditional buyers, it is being held hostage by the atypical buyer, who is immune to bank loans and interest.
“The construction sector is used as a channel for informal and criminal money, reducing the pressure to sell quickly and allowing prices to be kept high, regardless of the real income of families,” says Zef Preçi, director of the Albanian Center for Economic Research.
According to him, this informal flow of capital has created a “wall” of prices, which according to experts is deforming the national economy.
Property sales trend
Statistical data from the State Cadastre Agency show that 2022 was the “golden year” after the pandemic for the real estate market, while the following years saw a decline in sales.
Nationally, the property sales trend marked an absolute peak in 2022 with 37,684 contracts, followed by a substantial contraction of nearly 17.2% by 2024, down to 31,199 contracts. The market recorded growth again during 2025, where 36,027 real estate transactions were recorded.
While the number of transactions at the national level improved, Tirana – which holds the main weight with over 41% of transactions in these 5 years, still has not reached the sales level of 2022. Taken together, the 4 regions of ASHK in Tirana recorded over 17 thousand transactions in 2022, while in 2025 about 13 thousand.
The volume of transactions that took place in the capital, compared to the total in the country, fell from 45.5% in 2022 to 36.5% in 2025. The data shows that the market shifted to the coastline and other areas of the country, which are also responsible for what appears to be a recovery of the market during the past year.
For example, in the area covered by the “Tirana North” directory, which includes some of the fastest growing areas, including Bulevard e Ri, 4,735 sales contracts were registered in 2021 and increased to 6,201 transactions in 2022.
But after this moment the market fell. In 2023 the number of sales fell to 4,729, and in 2024 it touched the end of this cycle with only 4,073 contracts, a drastic drop of nearly 35% compared to the boom year.
According to Ylli Sula, head of the “Celesi” company that compiles the “Keydata” price index, this is the area with the lowest prices in the capital.
“From this relative perspective, this area remains, as before the price jump from 2022, the area with the lowest prices in Tirana,” says Sula.
He explains the decline in transactions with the decline in internal migration numbers and the inability of this group that moves from the districts to Tirana to buy at current prices.
“As for the decrease in the volume of contracts in this area, our interpretation relates this phenomenon mainly to the decrease in the internal migratory flow towards the capital from the layer of buyers with a low economic level that has been the main potential for this area over the years and to the inability of this layer to cope with this level of price increase”, he said.
A similar trajectory is observed in the area known as “Tirana South”, which includes the center of Tirana and the coveted area around the Artificial Lake park. From 3,960 contracts in 2022, the figure in this area fell to 3,109 in 2024. The south of the capital made a stronger comeback in 2025, but again fell short of the figures of two years ago.
“Inelastic Investor”
According to the “KeyData” index of the Çelësi company, property prices in the capital for the last 3 years (2023-2025) have increased between 49.4% in the northern area and 74.9% in other areas of Tirana.
For the economic expert, Zef Preçi, the increase in prices despite the decrease in demand has a number of factors, which include higher costs, the increase in local and central taxes, the increase in reference prices and a speculative market with a large presence of dirty money.
“There are some indicators where one can reasonably suspect the presence of dirty money in the construction sector, but none of them are ‘proof’ alone,” he says, mentioning the forms of financing luxury projects in the capital that are being developed by companies without clear capital.
For him, erecting large towers without obtaining credit is a clear signal of danger.
“We have construction companies with very low turnover declared over the years, which suddenly receive permits for projects worth tens of millions of euros and do not report the source of capital, or have an ownership structure with a chain of shell companies, often offshore,” Preçi emphasizes.
Even Eduard Gjokutaj, head of the economic research center ALTAX, explains that the increase in prices is being led “by a selective demand focused on the premium segments.” This creates what he calls the “inelastic investor,” a profile that possesses abundant liquidity and does not react to price fluctuations.
For experts, this market, which is dominated by buyers who don’t ask about prices, is evidence of the informal economy and suspicions of money laundering. Eduard Gjokutaj warns that the financial landscape of Tirana cannot be analyzed without taking into account the “red flags” that wave over this sector.
“The systematic gap between the prices stated in the contracts and the real market value is the first signal of a parallel economy,” he emphasizes. According to him, this phenomenon is easily confirmed by another anomaly: “An extremely low ratio of mortgage loans against total transactions, which suggests that a significant part of real estate is being absorbed by liquidity outside the banking system.”
Likewise, another alarm signal is the so-called “flip transactions” or the quick resale of properties: “With no real residential or economic function, it indicates a speculative nature of the market,” Gjokutaj emphasized.
Dutch disease
The 2023 Population and Housing Census data from INSTAT show that the residential population in Albania has suffered a drastic decrease compared to 2011, a phenomenon that affects almost the entire country.
The district of Tirana is the only one that still records an increase in population, thanks to continuous urbanization and internal migration to the capital. But despite this population growth, in 2023 there were 52,800 uninhabited flats in the Municipality of Tirana. Calculated on a conservative average surface area of 80 square meters and the average state reference price in the capital of around 1,290 Euros per square meter, these empty buildings represent nearly 5 billion Euros of “frozen” capital.
Despite the population decline, INSTAT data show that in 2024, permission was granted for 2.4 million square meters of new construction areas. In 2025, the area fell to 1.3 million square meters.
This situation is threatening, according to experts, the macroeconomic structure of the country. For Zef Preç, this is a deep paradox since the current volume of constructions is not based on any real macroeconomic projection.
“The IMF and other institutions expect real GDP growth of around 3–4% per year in the next decade…, this is not enough to justify construction taking such a large share in total investment, reaching about half of investment in some years,” he explains.
This craze for throwing money into concrete is having knock-on effects. Preçi uses the term “empty towers” to describe the thousands of unused apartments and offices that hold huge investment values locked up.
“The more capital is held in empty buildings, the less capital is left for sectors that increase productivity and exports, inhibiting long-term GDP growth,” warns Preçi.
Even Gjokutaj emphasizes the same point that construction has abandoned its social function.
“Property is being used as a ‘store of value’, fueled by inward urbanization towards the capital and diaspora demand,” he said.
According to him, Albania risks getting into what is known in the economy as the “Dutch Disease”, when the strengthening of the local currency due to large inflows of foreign currency to buy real estate affects the rest of the economy.
“We are in conditions defined as ‘Dutch Disease’, where excessive concentration in one sector (construction) ‘kills’ other competitive sectors by increasing input costs (labor and land)”, says Gjokutaj. According to him, this situation creates an “illusion of wealth”, while leaving the productive and innovative sectors underfunded, hitting long-term sustainable development.
