Post by account_disabled on Jan 24, 2024 15:09:23 GMT 8
Housing prices during 2022 have increased at rates three times higher than the historical average. According to data from the Bank of Albania, the housing price index in the third quarter of 2022 results in an annual increase of 17.6%, while the historical average growth of this indicator (for the period from the fourth quarter of 2002 to the second quarter of 2022) results in the level of 5.7%. According to both, the real estate market continues to show high levels of price growth, despite the increase in inflation and the appearance of the first signs of a slowdown in bank credit.
The data of the Bank of Albania for the month of November 2022, the new Job Function Email Database loan for the purchase of real estate suffered a decrease of 12.4% compared to the same period of the previous year. The rate of decline deepened further from October's 8.6% level. These data show that especially the increase in interest rates is reflected in a brake on loans for the purchase of real estate by Albanian families. Increased interest rates make credit less affordable and attractive, negatively affecting demand. But, on the other hand, the increase in interest rates also increases the necessary income threshold to qualify as a borrower from the bank, also influencing the drop in supply.
In an environment with increased interest rates, it is logical to think that prices in the real estate market will experience a slowdown from the staggering growth rates that have been registered especially in the last two years. However, the Bank of Albania's latest survey of economic sentiment indicators showed that construction sector businesses continue to show expectations for price increases. The balance of responses (the difference between the percentage of positive responses and the percentage of negative responses) related to price expectations was positive with 32.3 percentage points for the month of December 2022. However, this level was the lowest since May 2022, indicating that expectations for price increases are also decreasing somewhat among construction sector businesses.
The data of the Bank of Albania for the month of November 2022, the new Job Function Email Database loan for the purchase of real estate suffered a decrease of 12.4% compared to the same period of the previous year. The rate of decline deepened further from October's 8.6% level. These data show that especially the increase in interest rates is reflected in a brake on loans for the purchase of real estate by Albanian families. Increased interest rates make credit less affordable and attractive, negatively affecting demand. But, on the other hand, the increase in interest rates also increases the necessary income threshold to qualify as a borrower from the bank, also influencing the drop in supply.
In an environment with increased interest rates, it is logical to think that prices in the real estate market will experience a slowdown from the staggering growth rates that have been registered especially in the last two years. However, the Bank of Albania's latest survey of economic sentiment indicators showed that construction sector businesses continue to show expectations for price increases. The balance of responses (the difference between the percentage of positive responses and the percentage of negative responses) related to price expectations was positive with 32.3 percentage points for the month of December 2022. However, this level was the lowest since May 2022, indicating that expectations for price increases are also decreasing somewhat among construction sector businesses.