Albania’s construction sector accounted for 14.4% of the country’s gross value added (GVA) in 2024, the highest proportion in Europe, according to Eurostat data. The figure marks a 0.6 percentage point increase from 13.8% in 2023.
By comparison, the European Union average stood at just 5.6%, highlighting Albania’s outsized reliance on construction activity.
Kosovo ranked second in Europe, with construction contributing 9.8% to GVA in 2024, followed by Slovakia (8.7%) and Iceland (8.4%). In the Western Balkans, North Macedonia followed with 6.6%, Serbia with 5.9%, Bosnia and Herzegovina with 5.5%, and Montenegro at the bottom with 3.9%. Greece had the lowest share in Europe, at just 2.2%.
Construction’s share in Albania has risen steadily in recent years—from 13% in 2019, the earliest year with Eurostat data. Analysts warn that such a heavy dependence on one sector exposes the country to significant economic risks.
“When nearly 15% of economic output is tied to construction and real estate, any slowdown in this market can disproportionately impact employment, fiscal revenues, and overall economic growth,” analysts say.
The lack of diversification, especially in innovative services and technology, makes the economy more vulnerable to cyclical and geopolitical shocks.
The country has experienced two major construction booms since 1999. The first cycle peaked around 2011, followed by a slowdown until 2015. The current wave began in 2017, driven by high-rise developments in Tirana and coastal areas. Building permits in the capital continue to hit record highs, with new high-rise projects announced almost daily.
Some analysts say the construction surge is partially financed through informal sources. Housing prices have far outpaced wages, with apartment prices rising nearly tenfold compared to average salary growth since 2014. Today, apartments in Tirana cost €1,500–2,000 per square metre, while the average monthly salary is just €770.
The appreciation of the Albanian lek also points to significant inflows of unregistered capital. Since 2016, the euro has lost around 27% of its value against the lek. Meanwhile, the country’s current account deficit—a key indicator of foreign currency flows—has shown no major improvement, reflecting Albania’s ongoing dependence on imports and limited domestic production.
While construction remains a growth driver, experts warn that the sector’s dominance may become a long-term liability without broader reforms and stronger institutional oversight.