The Albanian economy went through different stages during the recent decades as it passed from a centralized economy to a market economy. The construction sectors and the housing market gave a major contribution to economic growth during this period. The housing market is subject to various housing and social state policies that affect people’s decisions about buying a house. Moreover, the market is also closely related to the banking sector and its lending activity. According to the Bank of Albania (BoA) most of the investments in immovable properties are made through loans, thus changes to the interest rate can have an impact on the entire construction sector. Changes to the price of immovable properties have a key role in the decisions taken by central banks all over the world and this was confirmed by the global crisis of 2007-2008. However, the way these two sectors depend on each-other is difficult to understand if you don’t have a financial background.
The housing market, as well as the price of immovable properties, reflected a significant growth during the 2000-2007 period, and it went through a period of stagnation after 2008. There are many factors that have affected the growth in the construction sector, but the main ones relate to demographic and population factors; shifts in the family structures; migration and increased demand for housing; economic boost and improvement of the banks systems including favorable currency rates; low quality of current buildings.