Questions and Answers
How much would a property cost me and how big are they?
In the major office developments the last fifteen years the first office buildings were the Sky Tower of 8,000 sqm (2005), the Twin Towers of 11,800 sq m (2005), the European Trade Center of approximately 9,000 sqm (2006), the G-KAM center of 4,500 sqm (2008) and the Hekla Center of approximately 3,000 sq m (2009). During 2012, no new supply was added to the total office stock, which has been registered at 63,400 sq m since the first half of 2009 after the entrance of the ABA Business Center into Tirana’s Real estate market. Currently, the Grade A inventory comprises the largest proportion of office space with 34,300 sq m against 13,000 sq m of grade B+. 16,100 sq m Grade an office buildings in Tirana include Sky Tower, Twin Towers, the European Trade Center (ETC) and ABA Business Center. Nearly 80% of the business towers are located in the Central Business District. The remaining office stock is spread across the broad center and central Tirana.
Projects currently under construction are expected to increase the office stock by a further 238,700 sq m in the next 2-3 years, where Archea Tower is planned to be approximately 12,000 sq m, American BC nearly 3,000 sqm, Millennium BC 8,700 sqm, TID Tower 15,000 sq m and Tirana Business Park 200,000 sqm.
In the first half of 2012 there are issued almost no construction licenses in Tirana because of the municipality new reforms. There are many reasons why the supply has slowed down. Factors that contribute to this slow down are the lack of construction licenses, economic crisis in the neighbor countries from which Albania has the most remittances, slow development on completing the constructions by the builders and tougher financing regulations from banks and financial institutions.
Residential property prices in Albania have not seen any changes in the past 2 years. The prices in Albania are quoted in €. New high-end residential developments maintain the highest asking prices of €1,100 – 2,000 per sqm and are located on the best areas. In the mid-market the prices range from €500-700 per sqm. The prices have been under pressure to go down and we have observed a decrease in prices in areas that have slow sale rates. But in the luxury areas there are still high prices and pressure from the buyers to lower it.
The land market in Albania has increased throughout the years due to the buyer’s interest in bigger areas, mainly for construction of tourist complexes. The agro land asking price vary from €15- 200 per sqm depending on the position, also in relation to the main roads.
The industrial land asking prices vary from €30- 250 per sqm depending on the position, also in relation to the main roads. The plot land asking prices vary from €70 – 1,400 per sqm depending on the position, also in relation to the main roads and to the city. The highest prices are noticed in the proximity coastline and on the side of national highways.
As a result of the lack of urban studies and indifference to the illegal constructions, there has been an artificial increase of the land prices in the tourist areas of the country. With the performing and approval of urban plans in Albania, significant differences in terms of land value within these areas are expected.
Do apartments come furnished?
It would be very unusual to find apartments being sold with furnishing. Considering that competition is becoming stronger and stronger developers are more willing to offer furniture, higher quality works, and therefore accept lower margins. This is a positive sign, and we are witnessing more reasonable pricing and developers thinking of offering more than just accommodation.
Furniture packages are available through Albanian Property Management and will cost from about 3,500 Euro, depending on grade and amount of bedrooms.
After-sale services include
• Furniture Packages
• Property Management
• Property Rental Services
Air conditioning costs from 320 Euro per unit but it is sometimes included in the developer’s price. However, do expect the following to be included in your apartment: plumbing, electrics, sanitary ware / bathroom tiling, sockets, doors, double-glazing.
How much is the Reservation/Agency fee?
The Reservation/Agency fee is 2,000 Euro for apartments and Land fees 6 % on a sliding scale downwards. This fee is payable immediately on return of the reservation form. On receipt of this money and form, there is usually a cooling off period of 15 days, in case the buyer, should wish to not proceed with the purchase. On receiving of this fee Albanian Property Management communicates with developing company and takes the apartment out of the market. With the next step client can start the legal proceedings in order to finalize the undertaking contract.
What do I get for my agency fee?
We work on a set reservation fee as oppose to a percentage as we feel it penalizes the higher spender. The fee is small in comparison with other countries.
• Airport transfers arrangements from Tirana to any destination in Albania through our sister company Albania Taxi
• Accommodation Arrangement
• Market overview
• Property Tour
• Legal advice
• Assistance with arranging finance/opening a bank account
• Power of Attorney option and we can finish the paperwork for you once you leave.
• Discuss After Sale Services through our agency such as: Property & Rental Management, Furniture Packages.
What are the payment terms?
Generally you would pay between 20%-30% of your total purchase after the pre-contracts have been signed by you and your POA. The percentage varies depending on how far the construction is towards completion. Then we try to put other payments in relation with the stages of construction. Therefore payments might follow with another 30% on completion of concrete shell of the residence, 15%-20% on completion of installations, 10%-20% on delivery of the apartment and 10% with registration and receiving of the title deed.
The final payment which is paid upon registration of the property takes time in general. It comes after completion but what is more important clients can furnish and live in the property before they receive the deeds. Nevertheless the new law which has come into force in 2012 aims to shorten the period of time between completion and the registration of individual property.
How can I instruct a lawyer?
You would expect to pay from 600-2000 Euro plus expenses for a quality English speaking lawyer in Albania. Price is determined based on how many units you buy. Further to our initial due diligence with a lawyer, in checking paperwork etc, your lawyer would be your contact through the initial contract procedure up until your first payment. They would also be on hand to remind you when further payments are due and to push for security of your title deeds after completion of the project. At Albanian Property Management we will be using our own in house lawyer to verify papers before passing onto the lawyers for final checking and stamps.
What is the process after the initial reservation fee is paid?
• Appoint a lawyer;
• Await POA certificate to be sent via email;
• Sign certificate in front of notary in your own country & have the POA apostilled,
• Return POA certificate to your lawyer in Albania;
• Receive by email draft of undertaking-contract;
• Liaise with lawyer for any issues or clarifications & agree on the draft;
• Await pre-contract signed by lawyer and developer;
• Transfer first installment into the developer bank account, based on with details supplied by your lawyer. Other installments will follow during the construction period.
Can I buy as an individual or company?
The tax benefits are better to buy as an individual for residential property, however a local company would be needed should you be venturing in securing land. With the latest improvements in the procedure of registering a company in Albania you can register a new company within 24 hours.
What other costs do I need to be aware of?
There is no VAT on your purchase and no transfer tax. Most countries around the world will charge a percentage of the purchase price, when buying a property in their country. This figure can vary from the 2% to 15% in those countries. This is not the case in Albania.
Should you decide to sell the property, there is a Selling Tax (similar to capital gains tax) of 10% payable in Albania, on the difference between purchase and sale. There is also a flat income tax of 10% on the rental income, should you rent your property out. Starting on January 2008 corporate tax was also reduced to a flat 10%, as is income tax. With all this in mind, your only extra fees in purchase will be real-estate agents and lawyers. For total tax and financial advice, Albania Property Group can recommend certified accountants to help you through any questions you may have in this respect
Is there a need for car parking?
Parking is a problem in Tirana and the coastal towns. Our advice at Albanian Property Management would be to purchase if you can afford it. It will be money well spent as an investment and will be an important commodity when selling or renting. Prices will vary from 12,000 to 25,000 Euro in capital city Tirana; 10,000- 15,000 Euro in Durres and Vlora; and 7,000- 10,000 Euro in Saranda.
What is the rental market like?
Albania has not been in the world tourist map before. However it has been moving up the league table gradually over the last 4 years and is accelerating fast. A 20% increase of the number of visitors over the last three years, through the international airport in Tirana, proves this. Albanian Property Management has always said that this is the beginning stage for the ones wanting to go for rental income. Anyhow, it is important to understand that on the coast the rental market is not great yet, but it is growing.
One would expect to receive a maximum of 6% rental income yield in the high summer months from best properties in the coastal cities. At same time rental income in central Tirana can surely go higher than what you could make in coastal cities. Big tour operators have low presence in the country for the time being, but the situation is changing gradually. Foreign operators have started cooperating with Albanian travel & tour companies. Once they are in, on a larger scale, then travel agents and holiday programs will be singing the praises of this stunning country and the rental market will shoot up accordingly. With ferries running daily from Corfu and Italy and major roads linking all parts of the country to their neighbors, already finished – tourism is becoming a very interesting and profit-making business.
Approx how much are communal charges?
Expect to pay around 150-200 Euros a year for maintenance in the residences without swimming pool. Then water, electricity, is paid based on consumption and an average monthly bill could go approx 50 Euro, or 600 Euro per year if the apartment is used during 12 months.
Do you organize Property Tours?
Property Tours: Many of our clients have never been to Albania and want to visit to get a feel for the country, the coastline, cities, its topography, and the various areas for potential investment. We welcome you and highly recommend that you come to the country and take one of our “Albanian Property Management Tours”. We are the most experienced in rentals and management in the Albanian market and now we have 3 offices in Albania – Tirana, Saranda and Vlora.
The property tour is a “rolling mini-seminar” through most key areas of the country – from Tirana, Durres and then down south to Vlora, Dhermi, Palase, Himara and Saranda. Our professional people have deep knowledge about property issues, property management, maintenance expenses, and other issues specifically relevant to owning investment property. We believe in educating our clients, not applying high pressure sales tactics.