The net sales volume index for real estate rose 38.9% year-on-year, the largest increase among the service activities covered by the survey.

Within tourism, hotels recorded a 22% increase in sales, while bars and restaurants grew 8.7%. Travel agencies, however, saw sales fall 5.4%.

Transport, storage and postal services recorded 19.1% growth, while insurance activities increased 8.9%. Wholesale and retail trade, along with the repair of motor vehicles and motorcycles, grew 6%.

Some service activities recorded declines. The sales index fell 5.3% in legal and accounting services, 6% in office administration and support services, and 0.6% in information and communication.

The expansion in activity was also reflected in employment, particularly in real estate and hotels. The employment index rose 26.6% in real estate and 11.5% in hotels.

Employment also increased in transport, storage and postal services, by 5.7%, and in trade, by 5.6%. Employment in bars and restaurants rose 2.2%.

Some activities, however, recorded declines in employment. The sharpest fall was in office administration and support services, at 12.1%, while insurance activities recorded a 3.5% decline.

INSTAT publishes short-term service-sector statistics as an indicator of economic activity across various sectors, covering trends in sales, employment and other developments in service activities.

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Compared with the same period a year earlier, wages rose in the majority of service industries, led by real estate activities, where the wage bill jumped 35%, followed by hotels at 22%.

Travel agencies posted a 20.5% increase, while wages rose 14.8% in security and investigation services, 14.6% in trade and by the same rate in bars and restaurants.

Further gains were recorded in information and communication services, up 10.4%, legal and accounting activities, up 6.1%, and transport and storage, up 1.2%.

Office administration and support services was the only segment to record a decline, with wages falling 6.5%.

Net sales volumes also increased across several key service industries. Real estate activities led growth with a 31.5% rise, followed by hotels at 12.6% and bars and restaurants at 8.4%.

Sales volumes increased 4.6% in trade and 1.9% in travel agency activities.

By contrast, transport and storage recorded a 3.8% decline, while information and communication services fell 1.6% and office administration and support services dropped 5.4%.

Seasonally adjusted data showed modest growth in hotels and food service activities, while transport, storage and parts of the information services sector recorded slight declines, INSTAT said.

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Speaking at a meeting with a construction business attended by Prime Minister Edi Rama, Ibrahimaj said the sector has been a key contributor over the past decade, with a broad impact across the wider economy.

She described construction as having a “multiplier effect”, with investments supporting continued economic expansion and contributing directly to higher wages.

According to Ibrahimaj, ongoing projects are expected to generate around 14 million euros in local tax revenues, alongside additional income from related economic activity.

She also cited the example of the host company, which currently employs about 200 people and works with 50 contractors, with plans to expand its workforce to around 1,000 within a year. Wages at the firm range from a minimum of 900 euros to an average of 1,700 euros, with top salaries reaching 3,600 euros, significantly above the national average.

Ibrahimaj said such projects, developed to high urban standards, serve as models for future investment, adding that improving worker welfare and raising wages remain central to government policy, while also boosting social security contributions.

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INSTAT said in its latest Short-Term Statistics and Services Report, net sales volume rose 14.5% in hotels, 10.4% in transport, 9.1% in bars and restaurants compared to Q2 last year.

Real estate activities also grew by 11%, driven by increased property demand in coastal areas from both foreign buyers and Albanians living abroad.

The hospitality sector posted the highest employment growth at 8.7%, well above the overall service sector average of 0.7 – 3.7%.

Wages rose significantly in: Hotels: 25.2%, real estate sector: 18.4%, bars and restaurants: 12%.

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Real estate lending now accounts for roughly 27% of total loans to the economy. In June alone, banks disbursed 7.4 billion lek in new home loans, up nearly 60% year-on-year.

The surge is partly due to a rush of borrowing before new loan-to-value limits imposed by the central bank took effect on July 1. Under the new rules, banks may finance up to 85% of the purchase price for first homes in local currency and 75% for foreign currency loans. Stricter limits apply to second-home purchases.

Real estate loans are typically backed by property collateral – often the home being purchased – and growth has been particularly strong in coastal areas and Tirana. The volume of new euro-denominated home loans is also on the rise.

The debt-to-income ratio for lek-denominated mortgages is now capped at 40% for first homes and 35% for second homes, while for loans in foreign currency, the caps are 35% and 30%, respectively.

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In a live communication via his “Sy m’Sy’ social media show, PM Rama responded to a commenter regarding the real estate re-evaluation process.

The government head said that the process has been postponed for the second half of the year for a number of reasons, adding that the real-estate re-evaluation process entails large volume of work.

“Maps are being drawn, because a complete inventory of the sales and purchases is being made so that a favorable re-evaluation process is ensured for all the interested individuals,” PM Rama added.

He underlined that the goal is to complete the entire re-evaluation process within 2025, so that all Albanian citizens have their properties re-evaluated according to the current market prices as of January 1, 2026.

The initial phase is expected to focus on determining reference prices in cities outside of the capital, Tirana, before beginning the broader re-evaluation process.

As the Prime Minister Edi Rama has previously announced, this is set to be the last re-evaluation process and the new price reference in other cities across the country and in the coastal areas in particular will automatically increase the value of properties.

In 2023, reference prices for Tirana were approved, resulting in property value increases of up to 30% in premium areas. The comprehensive re-evaluation will also account for a 1% depreciation related to the age of properties.

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The Minister of Finance Petrit Malaj told lawmakers at the Parliamentary Committee on Productive Activities, Trade and Environment on Tuesday that the properties re-evaluation will proceed alongside the establishment of new reference prices across the country, aiming to benefit all citizens.

“This process will last throughout next year as we set new reference values,” Finance Minister clarified.

The decision comes after plans for a September launch were stalled due to unfinished reforms concerning national property reference values.

The initial phase will focus on determining reference prices in cities outside of the capital, Tirana, before beginning the broader re-evaluation process.

As the Prime Minister Edi Rama has already announced this is set to be the last re-evaluation process and the new price reference in other cities across the country and in the coastal areas in particular will automatically increase the value of properties.

In 2023, reference prices for Tirana were approved, resulting in property value increases of up to 30% in premium areas. The comprehensive re-evaluation will also account for a 1% depreciation related to the age of properties.

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The Bank of Albania said Thursday that investment in the real estate sector accounted for around 23% of the total value of the FDI flows into the country in the first quarter of 2024.

The quarterly data confirm an upward trend of FDI flows into the country’s financial and oil sectors in the last few years.

FDI flows into the financial sector accounted for 21% of the total, the oil sector constituted 13%, energy and communication sectors accounted for 5% of the total volume of investment each.

According to the Central Bank data, FDI flows to Albania amounted to 1.49 billion euros last year, registering an 8.7% year-on-year increase, with the investment share in the country’s real sector estimated at around 22% of the total value.

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Data from central bank showed that investment in Albania’s real estate sector by non-residents in the January-March period amounted to around 84 million euros, registering a 71% year-on-year increase.

Investment in the real estate sector accounted for around 24% of the total value of foreign direct investment (FDI) into Albania.

According to the findings of a regular survey of Albania’s central bank, around 26% of real estate properties sold in the second half of 2023 were purchased by non-residents, with one third of them coming from non-EU countries.

The Bank of Albania estimates that the stock of foreign investment in Albania’s real estate market amounted to 1.66 billion euros in the end of the first quarter of 2024, edging up by 41% compared to a year ago.

The share of foreign investment in real estate has increased by almost 22 times in the last decade.

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According to central bank, the stock of foreign currency-denominated loans collateralized with real estate account for 60% of the total and the stock of Lek-denominated loans collateralized with real estate represent 52 % of the portfolio.

The indicator of real estate collateralization for households is higher, with real estate collateralization for foreign currency-denominated loans estimated at 72 % and 55 % for the Lek-denominated loans. Real estate collateralization for businesses is estimated 70 % for foreign currency-denominated loans and 48% for lek-denominated loans.

Other types of collateral cover 33% of the loan in foreign currency and 27% of the bank loan in Lek. < The cash collateral covers 4% of the loan in foreign currency and 2% of the loan in Lek.

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