A strengthening ALL lowers prices in housing market: BoA
The Bank of Albania reported once again a decline in housing prices in Tirana for the last quarter of last year.
Housing price survey showed a decline of 1.4%, causing this indicator to fall for the fourth quarter in a row.
Although the decline was somewhat lower compared to previous quarters, this trend contradicts the perception of builders and real estate agents who have reported improvements in real estate market performance over the past year.
Bank of Albania’s experts explain that their survey is based solely on the prices offered in the main newspaper of announcements in Tirana.
According to them, the performance of the index reflects even the exchange rate performance.
The index is calculated by constructing the prices in ALL, while properties, in the overwhelming extent, are traded in euro currency.
The lek’s appreciation in the foreign exchange rate, therefore, seems to have lowered properties’ real prices for most Albanian buyers, who have their income in ALL.
In the last two years, the Albanian Lek has shown an appreciation trend against the euro.
According to the Bank of Albania, in the fourth quarter of 2017, this strengthening amounted to 1.9% in real annual terms.
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