Major real estate project drives sharp rise in foreign investment

The second quarter of the year has given a strong boost to the further growth of foreign direct investment.

Bank of Albania data shows that for the second quarter of 2025 the value of foreign direct investment reached 741 million euros, up 86% compared to the same period a year earlier. According to the Bank of Albania, this growth was significantly influenced by flows linked to a major development project in the real estate sector.

Although the project is not specified, the Central Bank most likely refers to the much-discussed investment of recent months in the Zvërnec area.

In May, according to other Bank of Albania statistics, a sharp rise in foreign currency deposits was recorded. Transferable deposits of “private non-financial corporations” grew in May by 152 million euros, or 10% compared to April 2026. This is the largest historical increase in businesses’ foreign currency deposits since January 2016, when the Bank of Albania reports the data. Market actors linked this increase to the land transaction in the Zvërnec project, which was also investigated by SPAK, which announced it blocked a contract worth 128 million euros.

Unusual rise in euro deposits by 218 million euros in May, from business and other accounts

For the entire first half of the year, the total value of foreign direct investment reached 1.144 billion euros, up 50% compared to the same period last year.

What is being observed more and more in the post-pandemic period is the growing concentration of foreign direct investment in the real estate sector.

Last year, real estate brought in more than a third of foreign direct investment. Demand from non-residents is estimated to have largely supported the rise in real estate prices, particularly in coastal areas.

The Bank of Albania estimated that at the end of 2025 the stock of foreign investment in Albania’s real estate market reached 2.63 billion euros, up 29% compared to a year earlier. In the last decade, the stock of foreign investment in real estate has grown nearly 17-fold.

Meanwhile, in 2026, the real estate sector is leading the foreign direct investment structure for the fifth year in a row.

The project mentioned by the Bank of Albania has also significantly affected the balances in the distribution of foreign investment between new flows and reinvested earnings. For the second quarter, new flows, influenced especially by the project in question, reached 497 million euros, 150% more than the second quarter of last year. For the first half, new flows were calculated at 684 million euros, up 98% compared to a year earlier. This year, new flows make up almost 60% of foreign direct investment.

Foreign direct investment plays an important role in the balance of payments, offsetting the current account deficit and the economy’s need for foreign currency for goods imports.

Source: Bank of Albania