The real estate sector is dominating foreign investments for the fourth consecutive year, with an increasingly higher share.
Foreign investments in property in the third quarter of 2025 reached 150 million euros, 70% more compared to the third quarter of last year.
For the entire 9 months of 2025, foreign investments in real estate reached the value of 403 million euros. The value of foreign investments in property has increased by 50% compared to the same period last year. Investments in this sector account for more than 33% of foreign investments for this year, up from 23% a year ago.
Purchases by foreign nationals in recent years have been a significant factor in the property market in Albania and have played a significant role in increasing property prices, especially in the coastal areas of the country.
After real estate, the sector with the highest value of foreign investments is the financial sector. The value of foreign investments in the financial and insurance activities branch for the 9-month period of 2025 reached 219 million euros, an increase of 6.3% compared to the same period a year earlier. The increase in the value of foreign investments in this sector in recent years has been mainly related to the increase in capital and investments by existing entities in the market.
The new regulatory framework, which has been implemented since 2019, has forced banks to gradually increase their share capital. The increase in bank profits in recent years has also positively affected the performance of reinvested profits.
Meanwhile, in 2025 there is a return of interest from new investors in the banking sector. The Bank of Albania has approved the entry into the market of two new banks, a branch of the Turkish bank Ziraat and the digital bank, Jet Bank.
Other sectors traditionally heavy in foreign investment, such as industry or energy, are showing a decline this year.
The third sector in terms of the value of foreign investments is the extractive industry. For the first 9 months of 2025, investments in the extractive industry sector amounted to 134 million euros. However, investments in this sector have decreased by 17% compared to the previous year. Flows in this sector consist mainly of reinvested profits of existing companies in the activity of extracting crude oil. The decision of Shell to cease operations in Albania may have also had an impact on the decline in foreign investments in this sector for the second consecutive year.
The manufacturing industry branch is also showing a decline. For the first 9 months, foreign investments in this sector reached 77 million euros, down 62% compared to a year earlier.
The energy sector ranks fifth in terms of the value of foreign direct investment, with 92 million euros for the first 9 months of 2025. However, even in this sector, the value of foreign investment is declining, by 26% less compared to the same period last year.
Energy has led the growth of foreign direct investment in Albania for years, mainly thanks to the major investment in the TAP gas pipeline, but also other projects, especially in hydropower. In recent years, there has been an increase in interest mainly in the construction of photovoltaic parks, which produce solar energy.
According to data from the Bank of Albania, foreign direct investments in the first 9 months of the year reached a record figure of 1.21 billion euros, the highest historical level ever recorded for this period of the year. The value of foreign direct investments so far this year is up 4% compared to the same period a year ago./ Monitor
