albania property market to be boosted by 2010 economic growth
News Posted On: 03 November 2009
Albania has recently unveiled its draft budget for 2010 forecasting 5.3% growth next year. This does not seem unrealistic, given that the country has continued to grow economically even during the global recession.
However, the claims in the draft budget of Albanian incomes increasing by 15% have come under fire from the International Monetary Fund, which says they are unrealistic and that "Albania needs realistic expenditure programmes in order to avoid a crisis," said Gerwin Bell, head of the IMF office in Tirana.
We can all argue till the cows come home about whether or not Albania's economy will growth by 5.3%, those involved in the market or positive about the market saying that it will and an equal number of critics saying it won't. Few can argue about whether the economy will grow however. I personally think a growth of about 3.5% is more attainable as the world gradually emerges from recession.
Any single digit growth in the economy -- especially if it does result in wage growth -- is good news for the Albanian property market. Sure, Albania property became very popular with foreigners between 2006 and 2008, but the core market was always the growing Albanian middle class.
Though there have been reports of price falls in Albania, the market has been kept far away from the total collapse seen in other markets; not least because the economy has also been fairly resistant to the downturn and demand for property -- if a lot lower than in 2007 and 2008 -- has remained steady.
Thus, if the middle class growth can be successfully restarted then demand will start to grow for quality property, and prices will also begin to grow. There is also the improved road adjoining Kosovo to consider, as this may present a strong holiday rental market as tourists flock in from landlocked Kosovo to Albania's best beaches.
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