The extreme measures which were introduced to curb the spread of Covid-19 brought every sector of the economy to its knees. But how did the pandemic affect the real estate sector?
Nuveen study on real estate
Based on a study by international company, Nuveen, the sector which suffered the hardest blow was the hotel industry followed by the retail sector. But a return to normality is still far away and smart work or working from home led to a falling demand for office premises. This is one side of the medal. In the real estate sector, sales of residential premises, healthcare premises or warehousing, were steady. The study also suggests that sectors such as the industrial sector, telecommunication and data centers performed well.
The real estate sector in Albania
The residential sector performed well not only in the USA, but in Albania too. People moved to areas with a smaller population density, clean air and away from urban centers, in other words, in what many refer to as second homes. This led to a growing demand for suburban homes or suburban structures as they’re often referred to. In Albania, these suburban homes can be found in the luxury complex situated at Lalzi Bay. This area has several resorts and residential homes, which have become a favourable choice for many people due to the numerous facilities they provide. Meanwhile, there’s also a growing demand for shops and business premises within these residential areas to meet the needs of residents. This growing trend is also attracting companies specialized in dedicated services starting with internet and telephone providers, the Post Office and courier services. This new approach could also act as a potential scenario in terms of investments in the infrastructure of these newly built urban areas, which came to life as a result of people’s desire to move away from urban centres.
Photo: San Pietro Resort-Gjiri i Lalzit
What will be the future of the industry?
It must be said that Albania is a suitable country to live in all year round thanks to its Mediterranean country. Because many foreigners are looking to move to Albania, the Albanian government has recently proposed a bill on “long-term residents in Albania”.
The approval of this bill would bring many changes in the real estate industry, especially in newly built residential areas on the Albanian coast, which now offer high quality standards.
This fact will also lead to an increase in the price of apartments, something which the Nuveen study on real estate has predicted.
This scenario could “threaten” to turn Lalzi Bay into a mini Sun Belt, like the one in the US. This also relates to the components that the residential area has and the growing demand from both domestic and foreign buyers alike. All of this is also attributed to the quality investments which have been made at Lalzi Bay in places such as San Pietro resort, which includes the 5 star MELIA hotel, a global brand in the tourism industry.
Why is buying during this period a bold and lucrative undertaking?
Like any other market, the real estate industry is also driven by demand and offer.
Foreign studies confirm the fact that: “For years now, demand for real estate is many times higher than the offer and the pandemic is not expected to have an impact on this industry”. This situation shows that the most “loyal” category of the Albanian real estate industry, which focuses on the purchase of real estate, mainly residential properties, has profited rather than lose during this difficult period.
On the other hand, the banking sector also has a tendency to credit such investments rather than keeping customers funds in a saving deposit, which offers very low interests. At the same time, commercial banks are also offering different options for home loans in order to attract their customers. Collaboration with serious investors has also led to less stringent conditions when applying for a bank loan.
A good example for this is Fiori di Bosco at Don Bosco St. In this case, buyers are offered a preferential package of procedures which make it easier for them to buy properties at this complex. In conclusion, we must also cite what Kai Enders, one of the heads of Engel & Volkers AG, a world leader in real estate, confirmed: “Demand for home buying will not fall as a result of corona virus, because people will always want to live. And to live a healthy live, one must invest at the right time. One day, the pandemic will go away and in all sectors of the economy, there will be a higher consumer demand and as a result, prices will not be the same.”
Photo: San Pietro Resort-Gjiri i Lalzit