Is anybody out there looking at Albania? I realise the infrastructure isn't fully there yet, but the climate and culture seem attractive. I've read there is growing interest in Sarande - a coastal resort in Southern Albania, just across the water (ca. 20 miles, I believe) from Corfu. I don't know how true it is given the sorry state of the infrastructure in the rest of the country, but there are apparently plans to build a large airport near Sarande. There are several other intetresting-looking coastal locations. I also read there is potential inland - Lake Ohrid straddles the border with Macedonia. There is some tourism on the Macedonian side, but little yet on the Albanian side.

Hi Russell, we'll be talking an in-depth look at the potential of Albania on the site very shortly - so watch this space. cheers

It's always interesting to see where people are investing ,and where people are planning to invest over the next few years .... in CEE we've seen Czech Republic go first, then Poland and Slovakia, now Romania, where to after Romania .... Maybe this could be a useful theme for a PS webcast-type discussion? Good to see PS are onto it. Andrew

...and I had the map out the other day looking at Albania! I have not looked at Albania, but did hear that housing is quite high by EE standards, and that owners deliberately make their houses on the front appear rough, to avoid crime. It will be an interesting read.

Hi, I have been living and working in Albania (Tirana) for the last 12 months. Having worked in other CEE countries and Turkey over the last 5 years I can say Albania is different! I am also owner of Star Capital Finance which works with PS in CZ and SK, so I understand the issues of investing in property etc. Albania…..where to start! Zero infrastructures and I mean nothing. I recently drove from Tirana to Sarande and it took all day! The roads are very poor but there is a massive project underway to improve this and over the last 12 months I have seen great improvements. For example, there is now a decent road from Tirana airport to Tirana! Electricity and water shortages all over the country, but again improving. So it is a little different! But an improving country and one that does not deserve the bad press it gets in the West; all (majority) the Albanian gangsters and mafia are no longer in the country they have left for South London, Prague and Italy! The country is on its way towards the EU and personally I am confident they will join. Locals say 10 years, but I think it will be sooner. Look at what happened in Slovakia….they should have been joining now with Bulgaria and Romania! I lived in Slovakia for 18 months and Albania feels the same, the same political and economical problems and issues etc. A willing government can solve all this. The mortgage market is just starting however this is being “held up” by developers who do not register their developments in the land registry. Why? Because they illegally add extra floors to their developments to make more money! So, if it’s not registered no mortgage! The property market is driven now by black money and clean money being returned by Albanians abroad (remittances). Albanian clients turn up to buy property with carrier bags of cash. This one day will end and the demand for mortgages will grow, early signs of this are being seen. Furthermore the government is now beginning to enforce proper registration and the demolition of illegal property. Over the last couple of months illegal commercial buildings have been demolished, sometimes by force! I have seen coffee shops with customers inside and the demolition team and construction police (yes police) waiting outside to start work! The Rental Market in Tirana is also unusual. Why? There is a strong sense of family in Albania and the young tend to live with their parents until they marry. They will not (rarely) rent a property or buy a property prior to getting married. In my opinion I think this will change as the mortgage market comes on stream. This results in a very small rental market, one which is almost restricted to foreign expats. But, the stock of good property for expats is very limited. Another issue that is worth considering is the total lack of urban planning. This results in all types of building being built next to each other in unsuitable locations. Durres and Sarande in my opinion have been ruined because of this. Whatsmore, developers tend not to build roads leading to their developments and developments are serviced by nothing more than a rubble road. All this being said the weather is great, the south of the country is amazing (great coast) property is cheap and I think too cheap but it is a real long term investment for the brave. I have seen a lot of the country as I was working for the biggest bank in the country and know a lot anout the market. If anyone wants any more info then let me know. I have done a lot of research on bith the mortgage market and property market.

Paul Very interesting. Thank you. Have you invested there/would you invest there? Nick

Very interesting post. Thanks Paul.

Great post Paul I know very little about Albania but two things spring to mind from your post. 1. Geography - I don't think Albania has the strategic advantage of say Slovakia unless you know differently. 2. Joining the EU. I don't see any appetite in the EU for more poor and allegedly corrupt countries joining so my gut feeling would be Albania - no chance. Huw

1. Geography. Yes I agree, but it's a different beast to Slovakia. The country does a lot of trade with Greece and Italy. The country is becoming Italys back office, call centers etc etc. The country is also well known as a "FASON", for example shoe makers send the cut parts to Albania and the Albanian company put the parts together and ship back. Why? Labour is cheap and Albania is closer to Europe than China, therefore quicker turnaround times. However unlike Slovakia (cars) Albania does not have one strong (visible) industry. But, it can have Tourism, this could be a winner for Albania. Look at Croatia now montenegro, it has to follow in Albania. The south of the country is undiscovered! 2. EU. I disagree they will join. A good friend of mine is head of european intergration for the government. Its being taken very seriously by the Albanians and it seems the EU. They will join before Turkey! Have I invested no. I would selectively in Tirana and I would in the south. But as I said this is a long term play.

Thanks for the interesting comments Paul. I was just looking back at previous editions of Property Investor News which I hadn't read and there are a couple of very interesting articles in June and July about FDI and the impact on house prices. In summary it points to Ireland and the Baltic countries where high levels of FDI as a percentage of GDP can be linked to an explosion in property prices. In Ireland it was 17.5% of GDP starting in 1998 and in Estonia and Latvia 22-23% of GDP in 2000. The July issue looks for coutries where this is now the case (and concentrates on service related FDI, which it defines as R&D, logistics, ICT, customer and technical support, sales & marketing, headquarters, construction, tourism and leisure) and lo and behold the European winner is Albania! Currently service-related FDI is 20% of total GDP in Albania. The claim from the Irish and Baltic examples is that property price growth occurs in the 2 - 5 year period after mass FDI commences so perhaps now is the time to look at Albania? Intellectually I can see significant differences between Ireland, Latvia and Lithuania on one hand and Albania on the other. I also don;t know which of the above defined services are strong in Albaina. But what do I know? Perhaps it's time for a visit to Tirana. Paul, any thoughts? Huw