Apartment prices in Tirana have increased considerably, compared to the previous year.
Representatives of the Construction Association declare that buying an apartment in the capital should pay 14-16 per cent more than in 2015. According to them, this is the real estate market reaction regarding the added taxes applied by the Municipality of Tirana, which entered into force in March 2016.
But Mayor ErjonVeliaj has an original justification for this unusual rise in apartment prices. In a public outcry, broadcasted by Top Channel, Veliaj said that the price has increased because of the investments that the Municipality of Tirana has implemented in the urban infrastructure of the capital. According to him, “… if we continue to make investments, we continue to put asphalt, lighting, parks for the elderly, playgrounds for children and all modern infrastructure, the result immediately appears to the value of the growing property. So, someone simply because there was a municipality in charge of jobs, today has a property worth more than what was worth a year ago. But to keep that, we need to keep investments. ”
“Boldnews.al” reports that reality looks far different than it tries to present Veliaj with the marks of optimism that appears in public. At the end of December 2015, the Tirana Municipal Council approved the Mayor’s proposal to raise the level of taxes. In decision no. 59, dated 30.12.2015, states, among other things, that the tax on buildings for large businesses, including construction companies, is 440 leks per m2, from 280 previously.
This significant tax increase was opposed by both the opposition to the City Council and the Builders Association. These two groups predicted that this significant increase in the building tax would increase the prices of apartments in Tirana at an instant.
Opposition objections and interest groups were not supported by the majority in the Municipal Council. During the 3 quarter of 2016, housing prices throughout the territory of the great Municipality of Tirana have been progressively increasing. By April 2016, apartment prices increased by 4-6 percent compared to the previous year. At the end of June, prices also increased by 3-4 percent. By the end of August, growth has gone up 16 percent over 2015.
For every unsold apartment, builders paid a higher commission per square meter in 2016. This has led to the price offered to buyers higher than a year earlier. At present, it is estimated that in Tirana there are still unsold about 30 percent of completed apartments. Adding to the increased tax of the Municipality, the real estate market is still in a deep crisis.
ErjonVeliaj promised during the electoral campaign for the election at the head of the Municipality of Tirana that she would find a quick and efficient solution to block the apartment market in Tirana. In this challenge declared by him, he was strongly supported by Prime Minister Edi Rama. But at the end of the first year as the chief of the capital, Veliaj, not only did not present a solution, but added the problematic. Apartment prices are now about 16 percent more expensive and the upward trend is expected to continue. However, Veliaj has his own solution, at least in the media. He considers the rise in apartment prices as an achievement of public investment. The truth is very simple. It is found in increased taxes, but this is a topic that should not be addressed by ErjonVeliaj. Moreover, it should be denied as much as possible. And this public denial can do that, better than on Top Channel television.
