Money laundering fuels dangerous housing bubble in Albania – Release
Between €300-700 million dirty money enters Albania each year, according to an estimate by the Global Initiative against Transnational Crime (GIATOC).
On Wednesday’s Euronews program “In a few words”, Neritan Sejami focused on money laundering in the construction sector in Albania.
The dirty money entering the country has three main sources: criminal activity, corruption and tax evasion.
Over the past 3 years, an estimate €1.6 billion was laundered in the construction sector in Albania.
New constructions bloomed in Tirana, especially after 2015. Comparing the figures for 2015 and 2020, we note a 5-fold 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 stopped for construction projects and the overall growth of the sector does not reflect the country’s economic development and housing demand.
“Being illegal, these trends are difficult to study and assess,” Kristina Amerhauser, co-author of the GIATOC report, told the show.
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 50% in about 10 years.