Property in Malta has always been an interesting indicator of changes within the country, and recent trends certainly show that there is a changing property landscape. Last week our team attended the debate held by EY at Xaghra Lodge where these changes were discussed in more detail and a better overview of the current situation was revealed. One thing is certain – the property industry in Malta is currently thriving with agents across the country commenting on the quick turn-over rate. However, what about property prices? What’s driving the market, and what does the future look like? Join us as we delve deeper into Malta’s changing property landscape.
Trend 1- Property Ownership versus rent
As a population the Maltese have always been family oriented, having traditional family targets which include settling down in an owned property rather one that is rented. This is probably due to the traditional values of ownership being a sign of success and permanency whereas rental seems to be an indicator of something temporary.
What this means for the market is that home ownership in Malta stands at about 80% when compared to the EU average of 70.1% (As shown by Eurostat data in 2014). This data is supported through various schemes such as the First Time Buyers scheme and attractive rates on home-owner loans.
Trend 2 – Second residences
Apart from the Maltese trend of preference of ownership over renting, there’s a second trend of many locals having a second residence. Some of these may be Summer residences whilst others may be investments – a way of having an investment vehicle which may come in handy in the future.
Statistically 18.4% of Maltese people own a second home, compared to the EU average of 15.6% (Eurostat) – a clear indication of the strong property market within the island where many see property as a form of reliable investment and a concrete way of securing assets for a future date.
Trend 3 – Changes in family demographics
For years home ownership has been closely tied to family life. With the current changes in family structures come changes in the property scene. Many families are moving from the traditional nuclear family to single-parent families; and there has been an increase in the number of households per family, with families fragmenting into smaller units which each own or rent their own property.
This has created a wider range of preferred property types, with people also looking into the rental sector and also opting for smaller property types which are easy to move into or provide an ideal temporary solution.
Trend 4 – Migration
Migration has recently taken the forefront in many various global issues, and some countries which suffered deeply due to the recession have seen a slight boost in their property markets due to migration and movement across countries.
The recent influx of foreign workers has increased the rate of sales of property within the Sliema and St.Julian’s area and has also led to particular price hikes. Many foreigners working in Malta have a larger budget to spend on property and are eager to live within the more cosmopolitan areas of the North-Easterly region. This has led to a shift in property demands, with local families preferring property outside of this region due to more affordable pricing in other areas.
Trend 5 – Vacant Properties in Malta
The trend related to vacant properties is one with a variety of sides to it. On the one hand there are claims that Malta has 226 vacant properties per sqm while on the other there are claims that such a number shouldn’t be taken at face value as many of these properties are either second homes, investments, or are not ready to be put on the market. Other properties might be on the market but are too expensive at the moment.
Maltese legislation has been slowly moving towards laws which work to reduce the amount of vacant properties due to clashes over inheritors with the most recent legal change stating that if after 3 years the inheritors have not yet agreed on the sale of a property, the rule of 50% +1 majority will be applied in relation to the decision to sell. This could see more properties – particularly old ones such as houses of character – becoming available on the market in a shorter time span.
Trend 6 – Property Prices
With an annual growth rate of 4.5% or more over the last 15 years, Malta has seen a very healthy and steady increase in property prices. This is a sign of a strong economy and an indication of the opportunity for investment within the property market.
However due to Malta’s small size it’s also important to look at the market on a property type basis along with a focus on the smaller areas within the country. It would be better to compare Malta to cities within Europe rather than countries. Therefore it would be good to compare Malta’s property market to one such as London’s where property prices are currently on the rise due to an influx of foreign workers and limited space, but this might eventually drop. Either way, as with the local scene certain properties within key areas have become too expensive for local families and instead appeal to foreign workers.
So, what does this mean to you?
The way this affects you will depend on what you’re looking for within the property market. If you’re an agent then it will be helpful for you to keep an eye out for changes within the market and it will be good to appeal to the right groups based on the demographics.
If you’re looking for a place to buy or rent then perhaps you’ll want to look to different regions around the island so as to find the best price.
Whatever your situation it’s clear that the local property scene is doing well right now and it’s certainly a good time to buy or rent property – be it as an investment, or as a means to find the perfect home you’re looking for.
Drop us a line to find out more about what the numbers mean and how best you can make the most out of Malta’s changing property landscape.