Housing Lending Rises Sharply, Real Estate Accounts for 52% of Loans

Albania’s banking system closed 2025 with strong growth in financing for property purchases. Loans for real estate reached around 4.7 billion euros, representing about 52% of the entire loan portfolio.

According to the Annual Banking System Supervision Report for 2025, the largest share consists of loans taken out by individuals to buy homes, which account for 26.8% of total lending in the banking system.

They are followed by real estate loans taken out by businesses, with a share of 24.3%. Taken together, these two categories make up about 52% of the total stock of loans issued by banks.

In value terms, the stock of loans for property and real estate stands at around 243.6 billion lek for individuals and 216 billion lek for businesses, reaching a total of about 470 billion lek, or approximately 4.7 billion euros.

These figures show that banks have built up significant exposure to the real estate market, both in the household segment and in the business segment.

The Bank of Albania has viewed the acceleration of real estate lending as a factor that could pose risks to financial stability. For this very reason, new limits were introduced last year on two key indicators: the ratio between the loan amount and the value of the property, as well as the ratio of the monthly installment to the borrower’s income.

These rules are intended to curb lending at very high levels relative to property prices and to prevent cases in which the monthly payment becomes a heavy burden on household budgets.

However, even after these interventions, real estate loans to individuals have continued to grow, while this trend has also been influenced by the property revaluation process accompanied by lower tax liabilities.