Wages in the construction sector increased 4.3% year-on-year, making them the biggest contributor to the rise in construction costs.

Other costs increased 3%, transport costs rose 1.5% and machinery costs were up 1.2%, INSTAT said.

By contrast, material costs fell 0.6%. Within this category, construction materials declined 0.9%, plumbing and ventilation materials fell 0.7%, while electrical and communication materials decreased 0.1%.

Compared with the first quarter of 2026, construction costs increased 0.3% in the second quarter, with wages rising 1.1%.

INSTAT noted that the 1.1% increase in construction costs did not necessarily translate into an equivalent rise in apartment prices, which are also affected by land costs, financing, taxes, developers’ profit margins and market supply and demand.

The data show that despite lower material costs, rising wages remain one of the main pressures on the cost of building housing.

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The decision, proposed by the Ministry of Economy, Culture and Innovation (MEKI) in coordination with the National Housing Agency, is described as a strategic step intended to deliver direct benefits to citizens, particularly those enrolled in social housing programs.

Under the government decision, the average construction cost for 2025 is set at 56,491 lek per square meter nationwide. Specific cost values have also been defined for each city. In cases where data for a particular municipality is lacking, figures from the nearest comparable city will apply. Additionally, if construction prices change in accordance with the Integrated Construction Price Manual, data generated through the government portal e-Albania will take precedence over the approved national average.

MEKI stated the changes will result in greater transparency in construction projects, standardized cost estimates at both local and national levels, increased security for families in social housing schemes, and more effective planning of public investment in the housing sector.

The directive takes effect upon publication in the Official Gazette and is considered a significant step toward sustainable urban development and improved social housing policies in Albania.

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According to INSTAT, the construction cost index rose 1.6% year-on-year in the third quarter of 2024, down from 4.2% during the same period of 2023.

Compared with the same quarter of the previous year, the largest price increase is observed in the salary expenditure group by 3.2 %, followed by transport expenditures by 3.1 %, energy expenditures by 2.9 %, other expenditures by 2.0 %, and machinery expenditures by 1.5 %.

On the other hand prices of material expenditures decreased by 0.1%.

Within the material expenditures group, the index of the electric materials and communication group recorded the highest decrease by 0.3 %, followed by construction materials by 0.1 %.

On the other hand prices of hydro sanitary materials increased by 0.2 %.

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