Nearly 5 billion euros.
That is the value of loans that banks in Albania have issued for the purchase of and investment in real estate. The figure has reached record levels, and today more than half of the loan portfolio, about 52%, is linked to the property sector. Data from the Bank of Albania show that the real estate market remains the main destination for bank financing, holding the largest share in lending.
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“Housing loans for individuals account for the largest share of the total loan portfolio at 26.8%, followed by business real estate loans at 24.3%, overdrafts to businesses at 13.3%, and loans for equipment purchases at 11.6% of the total,” the Bank of Albania’s supervisory report states. This is a signal that demand for properties remains high. Households are financing home purchases, while businesses are investing in buildings, commercial spaces, and other properties, making the real estate sector the main driver of lending. In value terms, the stock of property and real estate loans stands at 243.6 billion lekë for individuals and 216 billion lekë for businesses, totaling 470 billion lekë, or nearly 4.7 billion euros. However, alongside this growth, portfolio quality remains stable. According to the Bank of Albania, non-performing loans have dropped to 3.8%, the lowest level since 2008, while the banking system has continued to expand lending. With nearly 5 billion euros invested in real estate, the property sector remains not only the main borrowing destination but also the area where Albanian banks have concentrated the largest part of their financial exposure. Just a few days ago, the Governor of the Bank of Albania, Gent Sejko, reported to parliamentary committees in the Assembly that the Bank has addressed the growth of real estate loans as a potential source of risk to financial stability and has strengthened data collection and analysis on housing loans, commercial properties, builders, and real estate projects. To curb exposure, for the past year the Bank of Albania has set restrictions on home purchase loans, from 85% to 70%.
