Tirana, the fifth most expensive in Europe to buy an apartment, is expected to increase again

2024-11-10 08:55:00, Ekonomi CNA

Tirana, the fifth most expensive in Europe to buy an apartment, is expected to

The high prices of apartments and the low income of Albanians continue to rank Tirana in the five most expensive cities in Europe for the affordability of buying a property.

According to Numbeo data for 2024, it takes 15.3 years to buy an apartment in Tirana, while in the most expensive city in Europe, Lisbon, a family needs 19.5 years to become the owner of a property.

In Numbeo's index, for 293 cities in the world for the affordability index of buying an apartment until mid-2024 (calculated as the ratio of average apartment prices to average disposable family income, expressed as years of income ) Tirana ranks among the European countries with the most expensive apartments.

Compared to a year ago, the property affordability index for Tirana was higher, namely 17.5 years. While for 2022, it was 15.7 years, while in the 2021 index, 16.2 years.

In 2024, the most expensive city in Europe is Lisbon with 19.5 years, followed by Paris and Split with 17.8 years. After them comes Milan with 16.3 years. After Milan, Tirana continues to remain the most expensive apartments in Europe.

In 2023, the most expensive city in Europe was Paris with 20.2 years, followed by Lisbon with 19.6 years, Dubrovnik and Prague with 19.3 years and Milan with 19 years. After Milan, Tirana ranked with 17.5 years.

In the world ranking for 2024, Tirana ranks 64th, ahead of Munich, where a family needs 15.2 years to become a home owner in this city, 14.9 years in London, 14.2 years in Rome and Vienna, 13 years in New York. , and Montreal, Canada, 10.9 years.

Belgrade continues to remain among the most expensive cities in the region. A family needs 19 years to become an owner. In the region, the city where families need fewer years of income to buy an apartment is Skopje, where this indicator is 13.8 years, and in Sarajevo, 13.6 years.

The most expensive city in the world to buy an apartment is Xiamen in China respectively with 48.1 years.

Real estate agents warn again of rising apartment prices

Builders previously warned that rising costs from the infrastructure impact tax will push up apartment prices again.

Real estate market insiders also predict that the increase in builders' tax obligations will be reflected in sales prices.

"From August 2023, with the entry into force of the new reference prices for Tirana, the obligation of builders for the infrastructure impact tax was automatically increased. The increase in costs is expected to be reflected in property sales prices", says Ylli Sula, head of the "Key Data" index.

After falling in the summer months, demand for property purchases has increased in the autumn months. But for real estate agents, compared to years, the demand is decreasing.

Stela Dhami claims that the demand for buying apartments in Tirana is led by Albanians of the diaspora and those coming from the districts.

"Many of the Albanian citizens in the diaspora and beyond remain interested in having an apartment in Tirana, as a bridge between them and their hometown.

Also, in projects near universities, many parents from the districts think of buying an apartment as an investment for their children who are looking to build a future in the metropolis.

While in coastal areas, the increase in demand was influenced by foreigners and Albanian citizens of the diaspora, since property prices still continue to be cheaper than those in Montenegro and Croatia".

Buying a house or renting it?

The price/rent ratio is used all over the world to show whether it is worth buying a house, or living in a rented house. It measures the value of a home, compared to the income you can get from it.

For example, if it is 15, it means that house prices are 15 times the annual rent that these houses would earn.

The price-to-rent ratio is the average cost of ownership divided by the rental income received (if buying to rent) or the estimated rent that would be paid if rented out (if buying to live).

Lower values ??suggest that it is better to buy than to rent, and higher values ??indicate that it is better to rent than to buy.

According to the data provided by "Numbeo", until the middle of 2024, for Tirana this ratio is 21.76 for the central areas, and 17.38 for the areas outside the center. So for areas outside the center, the ratio is within the home purchase limit.

According to experts' estimates, it is profitable to rent a house if this ratio is greater than 20, and to buy it if this rate is less than 15.

If the rate is between 15 and 20, then it makes more sense to buy, in case the buyer intends to live in the house for a long time.

For Skopje, this ratio is 30.06 for areas inside the center and for residential areas outside the center, 29.09; for Podgorica it is 18.7, for the areas of the center and outside the center, 19.01. For Athens, it is 23.6 for the central areas and 25 for the areas outside the center./ Monitor Magazine