Albania rising in the Air – Why we need a New Social Pact for Housing?

In Albania, owning an apartment is not just a right—it’s a national fixation, a symbol of security in a country where the present always feels uncertain. But behind the glossy façade of this “Albanian dream” lies a sobering reality.

Despite the continuous construction boom, housing is becoming a luxury rather than a basic standard of living.
Our main cities are filling with buildings while emptying of people. Speculation, lack of sustainable policies, and the imbalance between supply and demand have created a distorted housing market where property no longer serves the citizen—it serves idle capital.

Behind this construction rush, a silent housing crisis is deepening. It threatens to evolve into a social and developmental emergency, with the contours of a looming financial risk.
Signs of an overheated construction sector are no longer just warnings—they are becoming reality[1].

A construction boom without direction: The concrete ocean drowning livability
Over the last decade, construction has emerged as the most “dynamic” sector of the Albanian economy. But this dynamism is far from sustainable development. It’s largely fueled by remittances, undeclared income, and money laundering—not real market demand.

As a result, building is guided by speculation, not social criteria. It does not occur where the need exists, nor does it serve those who need it most.
This has led to an overproduction of luxury housing for a fictitious market, while the shortage of affordable units has turned into a structural crisis.

Housing has lost its social function. It has become a speculative instrument for accumulating wealth—often illicit.
Thus, more construction no longer means more shelter. On the contrary, it deepens social exclusion by creating an illusion of growth.

The construction growth myth—Who really benefits from the boom?
In our ever-changing urban landscapes, there is a massive mismatch between actual housing demand and supply.
We are building a lot—but for whom?

Investments are concentrated in the luxury segment, with prices that reflect neither real costs nor purchasing power. This is not just an economic phenomenon—it’s speculative.

The incentives are clear:
The absence of a real property tax on multiple dwellings encourages wealth accumulation. At the same time, the lack of market regulation fosters a “financialization” of housing—where apartments are treated as the most profitable asset, not a human necessity.

Those Excluded from the Housing Market
In this model, youth without credit history, informal workers, and emigrants who send money but lack documented income are systematically excluded.
They are not invisible by accident—they are left out due to the absence of inclusive public policies.

These citizens are being pushed not only economically but also geographically to the margins—into peri-urban areas with no infrastructure, services, or future.
In a fragile economy with high emigration, this is a recipe for demographic collapse.

Skyrocketing prices, grounded wages—A formula for class division
In a country where the average net wage barely exceeds €800, apartment prices have climbed up to €3,000 per square meter in urban zones.
This is an economic absurdity.

Low monthly incomes clash violently with ever-increasing property prices.
Young people, new couples, and professionals are often forced into decades-long mortgages—an insecure dependency that can span generations.
When a family must take on a 30-year loan for a basic apartment, they are not building a future—they are locking themselves into a debt spiral.

Meanwhile, a large part of the population—without access to formal loans due to income insecurity—remains entirely excluded from the system.
This is not just a market failure—it’s a failure of the state, which has never taken seriously its duty to ensure housing as a fundamental right.
Instead of a regulated market, we have institutionalized chaos.

The economic reality of citizens simply doesn’t match the housing market.
This is not just about financing—it’s about exclusion from the right to build a dignified life in one’s own country.

The Bank of Albania’s signal—Not a threat, but a warning
The Bank of Albania’s decision to tighten mortgage lending criteria (via DTI[2] and LTV[3] limits) was perceived by some as a blow to aspiring homeowners. But in fact, it was a preventive step against a financial crisis like the one in 2008.

Keeping lending under control does not mean excluding the middle class—it means avoiding a collapse that would later hurt banks, families, and the state alike.
Still, without state intervention in affordable and social housing development, the Bank’s action remains isolated—and potentially discriminatory for those without alternatives.

The state must shift from spectator to actor
In a market that has lost its social compass, only the state can restore the balance between the right to housing and market interests—through a well-organized intervention.
Not through vague promises, but with a National Housing Strategy that doesn’t stay on paper.

Such a strategy must include:

• Construction of affordable and social housing through PPPs and use of public land in major cities;
• Guarantee schemes for young people, new families, and vulnerable groups to buy their first home;
• A mandatory registry of real sales prices to ensure transparency and combat speculation;
• Fiscal regulation of the construction sector and a progressive property tax on multiple homes to discourage hoarding and unlock real supply.

Housing is a right and a condition for human dignity
Without housing, there is no dignified life.
Without affordable homes, there are no stable families, no middle class, and no active citizenship.

Let us stop treating apartments as status symbols—and start treating them as social needs.
Because Albania doesn’t need more concrete. It needs more people who can call this country “home.” If the course is not changed, we will face grave consequences: new urban elite enclaves, youth exodus, and accumulated social tensions.
Therefore, Albania does not just need new apartments—it needs a new social pact for housing, one that guarantees the right to live, not just to invest.

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[1] https://altax.al/en/product/are-we-on-the-verge-of-a-financial-bubble/

[2] Specifies that the monthly loan payment must not exceed a certain percentage of the borrower’s monthly income (usually 35–40%)

[3] Limits the loan amount in relation to the value of the property. For example, a citizen cannot receive more than 80% of the value of the apartment.