In the last several years Malta experienced a phenomenal expansion in the real estate market. Based on the Knight Frank Global House Price Index in the 2nd quarter of 2018, Malta’s real property prices rose (16.9 percent on a 12-month basis, compared to the year prior) in a higher rate than any other anywhere else in the world.
But, the increasing popularity of Malta’s property market, brings up more questions than answers for investors:
Are certain kinds of properties more sought-after than other types?
Are renters suffering more than buyers?
Should I buy or rent in Malta?
A second home is an investment that is worth it?
What is the best time to remain within Malta before I can decide to sell my home?
Do I get a bargain by avoiding the most crowded cities and neighborhoods?
According to the index by Knight Frank, Malta came in third at the conclusion of 2016 and was a impressive 20th at the conclusion of 2015. This index clearly demonstrates the positive, consistent trend of Malta’s real-estate market expansion. Thus, the index shows that Malta is among the most lucrative locations to invest in across Europe.
How did Real Estate of Malta get so popular?
It is important to note that the index of property prices for Malta is dependent on asking prices since the prices that are finalized after the sale of Malta are not released to the public.
In the last few years the area of Malta that is attractive to foreign investors from the field of financial services has experienced a significant increase. Some of the aspects of properties that are the most sought-after are:
Furnished apartments in new structures.
Valletta suburbs such as Sliema, St. Julians and Gzira have seen the prices of real estate rise the highest.
Complexes located in specially designated areas are more easily accessible for foreigners looking to purchase a house.
The high segment of the market for luxury has also been very successful over the last few times in Malta. It is likely that this market is driven by Maltese nationals as well as foreigners who are cashing on real estate gains elsewhere. Since Malta’s real estate market increases rental rates increase and more renters stay in the rental market longer.
This demand has driven residential rental yields over 5percent to the highest level in a few years. It is because the Maltese government has, in various ways, has created an open immigration-friendly atmosphere with the help of policies. There are, however there are some restrictions on foreign investors exploring ways to join the Maltese real estate markets.
Particularly, those who are not citizens of the EU/EEA (except Switzerland) face quite a few restrictions. In particular, those who are looking to purchase Maltese properties may take advantage of the Malta Golden Visa program or because of a different reason, is likely to purchase property in the designated zones that are outlined in the regulations of government. This is also the requirement to get an mortgage in Malta. So, the rates in these regions are generally higher.
There isn’t a specific storm clouds over Malta’s economic outlook. The economy is likely to expand, while regulation will remain stable and the steady banking sector will continue to provide home credit in Malta.
In the context of the outlook for real estate this is:
The real estate market in Malta will continue to rise, even if they withdraw from the world’s leading 17% of the territory.
If the price of real estate index continues to rise and the market continues to rise, the government will likely be required to take action at a minimum to assist those that will be priced out of the home ownership market and will see rents increase.
Companies that are registered in Malta have already shown an interest in moving out of Valletta and this could aid in spreading the real estate price hikes across other regions of Malta.
Short story, but due to its political and economically stable climate, Malta always stands out as a great choice for investment and its 2023 real estate forecast is a good indicator of this outlook, too.
CEBI, Level 3, Dar Ġuzeppi Zahra, University of Malta, L-Imsida MSD 2080, Malta