36% increase in the number of building permits issued so far this year – Released
Over 15.6 billion ALL (around 127 million euros) of building permits were approved in Tirana alone in the first 3 months of 2021. According to data processed and published by INSTAT.
Across the country, the approximate value of building permits approved in the first quarter of 2021 for buildings and structures is ALL 26.6 billion, or approximately 216 million euros. Compared to the first quarter of 2020, the value of construction has almost doubled.
Tirana is the city with the most building permits for this period, with 72 out of 251 permits approved across the region. Durrës follows Tirana with 44 building permits and Fier with 26 building permits. Most building permits are for dwellings and apartments.
Nationwide, the number of building permits has increased by around 36%, compared to the same period in 2020.
Between 300 and 700 million euros of dirty money enters Albania each year, according to an estimate by the Global Initiative Against Transnational Crime Initiative (GIATOC). Much of this money, which usually comes from tax evasion, criminal activity and corruption, is channeled into the construction industry.
In the last 3 years, around 1.6 billion euros have been laundered in the construction sector in Albania.
New construction flourished in Tirana, especially after 2015. Comparing the figures for 2015 and 2020, we note a fivefold increase in the total area built and for which local and central authorities have issued permits.
A similar increase was also seen in 2020, despite the fact that all other sectors of the economy suffered losses. Only the construction and real estate sectors recorded growth during the pandemic.
The increase in the overall area has ceased to construction projects and the overall growth of the sector does not reflect the country’s economic development and housing demand.
Dirty money in construction could trigger a real estate crisis, noted Ornela Liperi, editor-in-chief of Monitor, a business magazine.
She said that due to money laundering in the construction industry, apartment prices in Albania have increased by 70% in the past 4 years. In addition, they strengthen criminal groups and their political influence.
Liperi warned that Albania risked facing an economic crash once the construction bubble burst, pushing apartment prices down by up to 50% in about 10 years.