Albania the cheapest country in the Balkans

Over the last decade property in the Balkan Peninsula has become something of a magnet for overseas investors who have spotted the future potential of investing into its property markets at a very early stage. While markets such as Bulgaria, Croatia and Slovenia have become runaway success stories, there still remains a great deal of money to be the region in their neighbouring countries of Albania, Montenegro, Macedonia, Bosnia & Serbia where prices of commodities and service costs lag behind those of their rapidly increasing counterparts, a positive indicator of future growth to come.

A report commissioned by the European Commission (EU) has demonstrated the difference in prices across the region (based on 2006 data) where for example Croatian food prices are 87% of the EU average, but in Macedonia they are only 55% of the EU average. Interestingly, hotel prices in Croatia were found to cost 83% of the EU average where as Bulgaria registered only 35% of the EU average.

The report has also highlighted the difference in healthcare costs, which has created something of a new “medical tourism” market in other parts of the world, with more and more people from the UK choosing to have operations performed in foreign lands. Bulgaria and Albania are the lowest of the Balkan regions with healthcare costs only 20% of the EU average and while Croatia is the most expensive in the region, it still only costs half of the EU average.

The premise behind many of these Balkan countries joining the EU was to ensure that their services, legal system and standards of living were brought into line with their western European counterparts and to enable greater cross border co-operation.

Entry into the EU and adoption of the Euro currency has been a obvious precursor to major growth in property prices and commodity consumption. Whilst this may not necessarily be perceived as a positive sign locally, for overseas investors this is a sure sign of good things to come property-wise mirroring growth in basic commodities. EU entry and euro adoption for Slovenia, Bulgaria and Romania has had the effect of a basic increase per metre property prices .

Balkan countries at the bottom end of the pricing bracket, should in the longer term, work their way up the EU ladder especially with millions of pounds of EU grants at their disposal and in turn this should be reflected in their domestic property markets. It may not happen this year or next, but in the next 5 years there is almost certainly money to be made investing in property.